Question to the HM Treasury:
To ask the Chancellor of the Exchequer, with reference to Value Added Tax Act 1994 Schedule 7A, Group 1, Paragraph 5, on what basis some electric vehicle charging is taxed at a rate of 20 per cent VAT.
The domestic use of fuel (including electricity that may be used to recharge vehicles) is subject to the reduced rate of VAT of 5%. As set out in Paragraph 5 of Schedule 1, where a supply to a person at their premises does not exceed 1000 kilowatt hours per month, this is deemed to be domestic use.
However, for this provision to apply, the supply of electricity must be to a customer’s house or building. Where this is not the case (such as where a vehicle is recharged at a public charge point), the electricity is standard rated.
Further clarification can be found in HM Revenue and Customs Brief 7 (2021): VAT liability of charging of electric vehicles.