Landmark ruling sees VAT for EV charging set at 5%

The UK court has determined that VAT on electric public charging should be 5%, as opposed to the 20% currently paid by drivers, providing a welcome boost to cash flow for EV operators.

Charge My Street had brought forward an appeal against the 20% rate based on advice it had been given by Deloitte, arguing that existing VAT law says providing less than 1,000kWh per month of electricity to a person qualifies as domestic electricity, and that EV charging is unlikely to exceed this limit.

The First-tier Tribunal ruled that the 5% rate applied to public charging.

Daniel Heery, Director at Charge My Street, said: “This is a hugely important outcome – not just for Charge My Street, but for communities across the UK who rely on affordable, local EV charging. Our mission has always been to make neighbourhood charging accessible to everyone, and today’s ruling supports that mission.

“Lower VAT on charging improves fairness and helps accelerate the shift to cleaner transport for all. We rely on investment from ordinary EV drivers to extend our chargepoint network, and this result helps the commercial case for our current share offer.”

The news comes as analysis from the Department for Transport (DfT) shows that there are more public chargepoints than petrol pumps for the first time, suggesting that drivers will benefit from paying a 5p VAT rate instead of 20p. 116,052 public chargepoints in the UK exceeded an estimated 60,802 fuel pumps.

Logistics UK’s Senior Policy Manager Stephanie Haszczyn said: “Reducing VAT on public EV charging to 5% is a positive and long-awaited step that helps level the playing field for drivers and businesses that cannot charge vehicles at home or at depots.

“For many van operators and commercial fleets that rely on the public network, the previous 20% rate created an unfair cost barrier to electrification.

“This ruling should help improve the business case for switching to electric vehicles and support the wider transition to zero-emission road transport, provided the change is implemented clearly and consistently across the charging market.”