EV drivers could save £85m yearly with public charging VAT cut
FairCharge reports UK motorists could save £85 million in 2025 if VAT on public EV charging matches the domestic rate, with potential savings rising to £310 million annually by 2030.
The campaign group is urging Chancellor Rachel Reeves to reduce public charging VAT from 20% to 5% — the rate applied to home energy. This disparity affects about 40% of UK households without off-street parking who rely on public charging.
The UK leads Europe in EV adoption, with nearly 30,000 new electric car registrations in January — up 41% from last year.
“The UK is the most successful EV market in Europe, and the opportunities for growth are significant. But holding that growth back is an archaic piece of tax legislation conceived before the era of electric cars,” said FairCharge founder Quentin Willson.
Major industry players — including Stellantis, Polestar, and InstaVolt — support the VAT reduction, warning of a “two-tier system” that disadvantages drivers without home charging access.
Stellantis managing director Eurig Druce said: “The path to electric has been set. But there is a real risk of creating a two-tier motoring system where those with a driveway pay less to get around than those without.”
InstaVolt CEO Delvin Lane emphasized the simplicity of the proposed change: “This small change would bring fairness to those without home chargers, encourage more drivers to switch, and support price parity between home and public charging.”
Polestar UK managing director Matt Galvin highlighted industry investment in EV development, noting: “This is an urgent requirement to support EV adoption, particularly to encourage the private buyer, and prevent unfair costs to those without driveways.”
The government appears unlikely to implement the tax reduction. As EV adoption increases, declining fuel duty and car tax revenues from petrol and diesel vehicles create a significant funding gap — one that public charging VAT could help address.
According to Zapmap, the proposed VAT reduction would deliver immediate benefits to current EV owners while encouraging wider adoption.
