New research has shown that half of drivers would switch to an electric car sooner if the VAT on public charging matched that of home charging.
A pain point for many EV owners and a barrier to entry for non-EV drivers, public charging points are currently taxed at 20 per cent compared to 5 per cent when charging at home. Younger drivers, those living in flats or rental properties, and those without access to off-street parking are particularly impacted by the disparity in VAT charging rates.
The research by EV charging company Gridserve found that 84 per cent of 18 to 24-year-olds and 76 per cent of 25 to 34-year-olds say they’d be more inclined to switch to an electric car under a more even tax structure.
In cities where off-street parking is less available, drivers are especially keen to see a change in the VAT rate. Three in four Londoners say they’d switch to an EV sooner compared to the national average of almost half. Two in five drivers nationally called the disparity in VAT charging rates unfair.
EV running costs are typically cheaper than combustion cars, but the cost of using public charging points is significantly higher than charging at home, where overnight energy tariffs and reduced VAT can see prices fall as low as 7p per kWh. Drivers with at-home charging save around £1,000 per year compared to those without home charging, and around £800 compared to typical internal combustion engine drivers.
Gridserve CEO Daniel Kunkel said: “Removing VAT from public charging would be a significant move towards levelling the playing field and making EV ownership easier for everyone, no matter where they live. The current disparity between the 20 per cent VAT on public EV charging and the 5 per cent on home charging puts a disproportionate financial burden on those without home charging facilities, which could affect more lower-income households.
“Ahead of the MPs debate on VAT rates set to take place on Friday, we urge the government to take this opportunity to demonstrate its commitment to fairness and climate action by supporting this bill and ensuring public charging is not only reliable and widespread but also equitable for all.”
