Question to the HM Treasury:

To ask the Chancellor of the Exchequer, if he will make it his policy to review the VAT regime for electricity, in order to support electric vehicle uptake.

The Government is committed to supporting electric vehicle uptake. Since the Spending Review 2020, we have committed £2.5 billion to vehicle grants and charging infrastructure to accelerate the country's transition to electric vehicles. However, we have no plans to review the VAT regime for electricity.

Although the supply of electricity is normally subject to the standard rate of VAT (20 per cent), in order to keep costs down for families, the supply of electricity for domestic use, including charging electric vehicles at home, attracts the reduced rate of VAT (5 per cent).

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.