As the tax on household electricity drops to zero, the EV charging sector is intensifying calls for the Government to lower VAT on public charging to level the playing field for drivers without driveways.

Effective from today (1 October 2026), the Government has removed VAT on household electricity bills for six months to help with the cost of living.

But public EV charging remains subject to 20% VAT, prompting renewed calls for the Government to end the ‘pavement tax’.

According to EV charging trade association ChargeUK, the difference in VAT that a typical EV driver will pay on annual basis has now grown to £200, as a result of whether they can charge at home or not.

The VAT difference is based on a typical EV driver using a mix of 80% home charging and 20% rapid compared to one solely using public charging, assuming an 80% standard and 20% rapid public charging mix. The total annual cost for the driver with home charging is over £1,000 lower than the public charging reliant driver, with VAT now contributing £200 to the difference.

ChargeUK has coordinated a letter calling on the Prime Minister to end the divide, which affects the estimated 10 million households who cannot charge a vehicle at home. The letter, signed by industry and consumer driving groups including EVA England, EVA Cymru, the AA, Autotrader and the FairCharge campaign, argues that ending the divide would give millions more people the opportunity and confidence to make the switch to EV.

Shane Brennan, chief executive officer of ChargeUK, said: “Cutting VAT on home electricity is the right call at the right time, it will relieve some pressure on what will be a tough winter for energy consumers, including EV drivers.

“However, it will also entrench the driveway divide for those current and want-to-be EV drivers who pay the full 20% VAT to charge their cars at the worst moment.

“With diesel prices topping £2 a litre this week, and petrol not far behind, encouraging all drivers to go electric is the right thing to do; let’s make it fair and accessible for all.”

Earlier this year, a First-tier Tribunal between community charging operator Charge My Street and the HMRC ruled that public EV charging should already qualify for the ‘de minimis’ lower rate of VAT, then 5%. HMRC confirmed its position that 20% applies remained unchanged and said it was appealing the decision. As such, ChargeUK said applying the lower VAT rate to public EV charging would constitute minimal to no legislative change.

ChargeUK is calling on the Government to cease appealing the decision and equalise VAT on public EV charging with home.

Vicky Edmonds, chief executive officer of EVA England, said: “VAT relief on home electricity will provide welcome support with household energy bills. But for EV drivers, it just risks widening the existing ‘charging divide’ between those who can charge affordably at home and those who depend on the public network. Over three quarters of EV drivers believe the high cost of public charging is now the greatest barrier to owning an EV.

“The Government must take urgent action to close that charging divide, and reducing VAT on public charging would be a simple and visible first step towards doing so. At a time when more drivers are being encouraged to switch to electric, it is vital that whether a household can afford to do that is not determined by whether or not you have a driveway. The transition must work fairly for every driver, whatever their circumstances.”

ChargeUK estimates that lowering VAT on public charging would cost around £180m annually based on 2025 charging volume, with the potential to rise to around £260m on forecasts for 2026 and £354m in 2027. This is considerably lower than the £1.1bn that Treasury is forecast to rake in from taxing electric vehicle drivers in 2028/29 through the introduction of the 3p per mile Electric Vehicle Excise Duty (eVED).

ChargeUK members are highlighting the VAT disparity with various activities around the date. Fastned is turning all of its 41 charging hubs across the UK into a ‘nationwide driveway for the day’, by giving motorists £25 of free charging credit to highlight the growing driveway divide created by the VAT gap between home and public EV charging.

Meanwhile, Gridserve is cutting the price of its charging network by 20% for one day only on 1 October, giving drivers a real-world demonstration of what lower taxation on public EV charging could mean for the cost of driving electric.