A tax tribunal has ruled that the reduced 5% domestic VAT rate can apply to electricity supplied for charging electric vehicles (EVs) on the general public network, quite than the usual 20% rate.
The case was brought by community charge point operator Charge My Street which challenged the upper rate following advice from Deloitte’s tax specialists.
Deloitte argued that existing VAT rules already treat the provision of lower than 1,000kWh of electricity per thirty days to an individual at any particular premises as domestic and that this threshold could reasonably cover public EV charging.
Oliver Jarratt, director and VAT specialist for Deloitte Legal, said that even when a driver relied on the identical public charge point, it might be “nigh-on unimaginable” to exceed 1,000kWh per thirty days.
In a call published this week, the First-tier Tribunal – which heard the case last October – agreed that the 5% rate applies to public EV charging in those circumstances, rejecting HMRC’s interpretation.
Daniel Heery, director at Charge My Street, welcomed the ruling, saying: “Our mission has all the time been to make neighbourhood charging accessible to everyone, and today’s ruling supports that mission. Lower VAT on charging improves fairness and helps speed up the shift to cleaner transport for all.”
Writing on LinkedIn, Jarratt called the end result decisive, stating: “The judgment is obvious, unequivocal and a thumping victory for Charge My Street.”
He added that while HMRC could seek permission to appeal, he questioned whether it might be granted given, he says, “how strongly the Tribunal rejected HMRC’s arguments on what the terms ‘premises’ and ‘rate’ meant”.
HMRC has previously maintained that the reduced rate for small quantities of electricity only applies where there’s an ongoing supply to an individual’s house or constructing below 1,000kWh per thirty days and so “doesn’t apply to supplies of electrical vehicle charging at charging points in public places”.
It argued this was because supplies are made in locations similar to automobile parks, petrol stations and on-street parking quite than an individual’s home and since they aren’t normally an ongoing supply to 1 person where the speed of supply may be calculated.
An HMRC spokesperson told AM sister title Fleet News it’s “fastidiously considering the choice” and its “next steps”.
Last month, Treasury officials were reported to be exploring ways to cut back the price of charging EVs in public, amid concerns inside government that a planned pay-per-mile levy from 2028 could dent consumer demand.
EV adoption champions have long insisted that lower income households are being shut out of EV ownership, risking a two tier system.
In response to Autotrader’s No Driver Left Behind 2026 report, households earning under £40,000 are significantly less likely to think about an electrical automobile than higher income groups, with affordability the predominant barrier to adoption.
Commenting on the tribunal ruling, Matt Waller at The Charge Scheme said: “For too long, drivers and not using a driveway have been penalised by a VAT system that charges them 4 times greater than homeowners for the exact same electricity.”
“This ruling confirms what the industry has argued for years, and HMRC must now apply the 5 per cent rate across all public charging immediately quite than dragging this through an appeal.
“Nevertheless, VAT is simply a part of the affordability problem. Public charging can still cost as much as ten times greater than plugging in at home on an overnight tariff, which suggests thousands and thousands of people that rent or live in flats fundamentally face an unfair barrier to switching to EVs. Recent salary sacrifice schemes are already helping people in these situations save as much as 50 per cent on their home charging costs. So combining fairer VAT with salary sacrifice advantages would make an actual difference for the families who need it most.”
This Article First Appeared At www.am-online.com
