HMRC will appeal the ruling of a tax tribunal, which concluded in February that 5% VAT should be levied on public electric vehicle (EV) charging.
The ruling, led by Deloitte for Charge My Street, successfully argued that up to 1000kWh of electricity supplied to a single person always counts as domestic.
If successful, the appeal will ensure that public EV charging remains taxed at 20%.
The Charge Scheme recently announced that it would be cutting VAT on charging to 5%, while most other companies decided to await further clarity from HMRC.
Reaction:
Ginny Buckley, CEO at Electrifying.com:
“For a Government that talks about standing up for ‘working people’, the decision to appeal this ruling flies in the face of that.
“Ministers are doubling down on a system that penalises millions of drivers who rely on public charging.
“Those drivers can pay up to ten times more to charge an electric car than someone with a driveway – and in some cases, that makes EVs more expensive to run than petrol.
“This hits those without driveways the hardest, making it more expensive for them to switch and if the Government is serious about making EVs affordable, it cannot allow a two-tier system where access to cheaper, cleaner driving depends on what type of property you have.”
John Lewis, CEO at char.gy:
“This is a deeply disappointing decision, and one that sends entirely the wrong signal to the millions of people who rely on public charging.
“While home charger users pay 5% VAT, drivers without a driveway – disproportionately those in cities, renters, and lower-income households – continue to be penalised at 20%.
“The Government talks about accelerating EV adoption, yet is actively choosing to maintain a tax structure that makes public charging more expensive than it needs to be and undermines the transition.
“char.gy stands ready to pass on any VAT saving to our customers the moment the government does the right thing. The question is: what is the government waiting for?”
Tom Middleditch, head of B2B marketing and sustainability spokesperson at Europcar Mobility Group UK:
“HMRC’s decision to appeal the First-Tier Tribunal’s ruling on public EV charging VAT is yet another mixed message from Government on net zero.
“It seems wholly unfair that motorists who do not have access to home charging have to pay 20% VAT – our latest research shows that 43% of consumers are deterred from switching to electric because of lack of confidence in charging infrastructure and cost of charging will be part of that concern.
“This issue is particularly acute in the vehicle rental sector. Unlike private motorists and businesses that have made a long-term commitment to EV ownership, which probably means they can charge overnight at home – benefiting from the 5% domestic VAT rate – renters are almost entirely reliant on the public charging network.
“They are penalised simply because of how they travel. The four-fold VAT disparity between home and public charging is not just unfair; it is a structural barrier to EV adoption .
“At Europcar, we have made substantial investment in EV fleet, electrification of our branch network, plus resources and tools for motorists taking their first steps into electric motoring precisely because we believe in accelerating the transition to cleaner transport.
“We want to help our customers choose electric with confidence. But that confidence is undermined when the cost of public charging remains so disproportionately high.
“The Government cannot credibly champion electrification while simultaneously fighting in court to maintain a tax regime that makes public charging more expensive than at home.
“We urge HMRC to reconsider its appeal and instead work with industry to create a level playing field that gives every driver – including those who rent – a fair chance to go electric.”
Tanya Sinclair, CEO at Electric Vehicles UK:
“Drivers without off-street parking already pay more to charge simply because of where they live.
“HMRC appealing this ruling is the Government choosing to defend that inequality.
“If you’re serious about EV adoption, you don’t fight the ruling that would fix your most regressive charging cost. You let it stand.
“Their actions don’t match the narrative.”
Warren Philips, campaign lead at FairCharge:
“FairCharge has led on this issue, but consumers, industry and MPs alike have always known it was wrong.
“Charging people more because they depend on public infrastructure was wrong in principle, and the tribunal confirmed it.
“People unable to charge at home pay four times the VAT rate of their neighbours for identical electricity, a failing that persisted long after the legal basis was challenged.
“By appealing, the Government is telling 1.4 million current EV drivers, and more than 30 million who will have to switch, that it is willing to go to court to keep public charging costs high.
“It should accept the ruling and work with consumers and industry to put this right.”
