Electric Vehicles: Charging Points

(asked on 22nd March 2022) - View Source

Question to the HM Treasury:

To ask the Chancellor of the Exchequer, if he will make an assessment of the compatibility of differing VAT rates for public and domestic charging of electric vehicles with the principle of VAT neutrality.

Answered by
Helen Whately Portrait
Helen Whately
Minister of State (Department of Health and Social Care)
This question was answered on 29th March 2022

In order to keep costs down for families, the supply of electricity for domestic use attracts the reduced rate of VAT (five per cent).

Electricity supplied at EV charging points in public places is subject to the standard rate of VAT (twenty per cent). The Government has not specifically introduced a reduced rate for charging EVs at home. However, the practical challenges of differentiating between the electricity used at home for general domestic purposes, and electricity used to charge EVs currently mean that the reduced rate is effectively being applied to EV home-charging.

Applying the reduced rate of VAT to electricity supplied at EV charging points in public places 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.

The Government has no current plans to review the current rate of VAT applied to EV charging.

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