To ask the Chancellor of the Exchequer, whether his Department plans to offer a VAT reduction to owners of electric vehicles who charge their cars at public charging points.
Answered on
20 April 2022
In order to keep costs down for families, the supply of electricity for domestic use, including charging an electric vehicle (EV) at home, attracts the 5 per cent reduced rate of VAT. However, electricity supplied at EV charging points in public places is subject to the standard 20 per cent rate of VAT.
Expanding the existing relief would come at a cost. VAT makes a significant contribution towards the public finances, raising around £130 billion in 2019-20, and helps fund the Government's priorities including the NHS, schools, and defence. Any loss in tax revenue would have to be balanced by a reduction in public spending, increased borrowing, or increased taxation elsewhere.
Although there are no current plans to change the VAT treatment of electricity supplied at public EV charge points, the Government is committed to supporting the transition to zero emission vehicles to help the UK meet its net-zero obligations. The Government has committed £3.5 billion since 2020 to support the transition to zero emission vehicles, which funds targeted vehicle grants and the rollout of charging infrastructure.