The AA has reiterated calls for a VAT cut on public charging to drive the electric transition.

VAT on domestic electricity is charged at 5% whereas those using public charge points have to pay 20% VAT

Currently, VAT on domestic electricity is charged at 5% whereas those using public charge points have to pay 20% VAT – hitting the c.40% of drivers who don’t have access to a driveway to install a home charger.

Zapmap said last month that a reduction in VAT on public charging from 20% to 5% would save EV drivers around £85m in 2025 and £315m in 2030.

The AA EV Recharge Report for February 2025 shows that while prices were frozen across the board, EV drivers could save £4.80 per charge at ultra-rapid chargers if VAT was slashed.

Jack Cousens, head of roads policy for the AA, said; “The Chancellor has the opportunity to help the transition to electric cars, by making some positive fiscal choices on Wednesday.

“Cutting VAT to match the domestic rate of 5% will help households without dedicated off-street parking avoid the so-called ‘pavement tax’. As well as saving drivers nearly £5 a charge, it would encourage those changing their car to opt for one with a plug.”

The AA also urged the Treasury to rethink the upcoming application of vehicle excise duty (VED) on EVs.

For the first time in history, VED will be retrospectively applied to EVs that were registered before the introduction of rates. Any EV that was registered before 1 April will now be asked to pay the standard rate tax, currently £195 a year. On top of the standard rate, any EV registered on or after 1 April 2025 with a list price in excess of £40,000 (which includes any options) will also be liable to pay the expensive car supplement rate of an extra £410 a year for five years after the car’s first 12 months on the road.

The AA said it believes all vehicles should pay VED, but added that electric vehicle tax should be set at a discounted rate to incentivise their purchase.

Cousens continued: “As most private car buyers opt to buy a used car, the introduction of VED at the full rate from 1 April could have a negative impact on the future of EV ownership. Drivers tell us that incentives are still required at this early stage of adoption.

“While all should pay vehicle tax, a discounted rate for EVs would make buyers take notice before spending their hard-earned cash.”

The AA has also published the findings from its EV Recharge Report for February 2025, revealing charging costs were frozen from January while pump prices rose again.

Last month saw pump prices edge ever closer to 140 pence per litre, further driving up the cost of combustion motoring. As a result of the increase cost of fuel, off-peak ultra-rapid charging was a full 2 pence per mile cheaper to use compared to petrol.

AA EV Recharge Report February 2025 – Flat Rates

AA EV Recharge Report February 2025 – Peak and Off-Peak Rates

EV calculations based on adding 80% to a Vauxhall Corsa Electric, 50kWh, with a WLTP range of 221 miles. Adding 80% range equates to 178 miles of range.

Electric calculations based on Vauxhall Corsa 100hp 1.2-litre petrol with a 40-litre tank. 80% refuel = 32 litres. Petrol: 32 litres @ 139.80 ppl = £44.74. Combined Low MPG of 52.3 = 366 miles at 12.22 p/mile.