Electric vehicle lobby group FairCharge is demanding the UK cuts VAT on public charging to end the existing two-tier system and boost EV adoption.

Cutting VAT on public charging from 20% to 5% would save EV drivers around £85m in 2025

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

Data from Zapmap suggests a reduction in VAT on public charging from 20% to 5% would save EV drivers around £85m in 2025, increasing to £315m in 2030.

FairCharge said the current setup was a bizarre and conspicuous policy omission for a government with a strong commitment to supporting EV ownership – and has written to the Treasury to call for change again.

Quentin Willson, founder of the FairCharge campaign, said: “With the UK as the most successful EV market in Europe, the opportunities for growth in the sector are significant. But holding that growth back is an archaic piece of tax legislation conceived before the era of electric cars.”

FairCharge has been calling for change on the “illogical” VAT policy on EV charging since the group was founded three years ago. While the Conservatives rejected calls last year prior to the election, Conservative MP Sir Christopher Chope has now introduced the Exemption from Value Added Tax (Public Electric Vehicle Charging Points) Bill. Due for its second reading in Parliament on 13 June 2025, the bill seeks to eliminate VAT charges entirely for public charging points.

Quentin Willson said: “So many voices are now calling for a cut in the VAT on public charging that the Treasury’s negative response seems almost churlish. We spoke about this unfair tax anomaly before Labour came to power. It’s time for you and I to talk again.”

The call is backed by major electric vehicle makers, including Stellantis and Polestar.

Eurig Druce, group managing director of Stellantis UK, 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. That can’t be right and that’s why we support the FairCharge campaign.”

Matt Galvin, managing director, Polestar UK, added: “We have been calling for VAT on public charging to be brought into line with home charging for some time now. This is an urgent requirement to support EV adoption, particularly to encourage the private buyer, and prevent unfair costs to those without driveways.

“Manufacturers have invested billions of pounds in EV technology to meet mandates and now the industry needs the Government to play their vital role in achieving a net zero car market, which is pivotal to improve air quality and slow down climate change.”

Charge point operators including InstaVolt said any VAT cut would be passed onto consumers immediately.

Delvin Lane, CEO at InstaVolt, said: “The Government has championed the EV transition with bold policies and strategy plans, but has yet to act on one of the simplest, most obvious changes – cutting VAT on public charging. 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.

“It’s surprising that there has been no movement on this. With so much at stake for effectively so little cost, the Government should act now to remove this barrier and avoid stalling the EV revolution.”

Campaign group EVA England said it was vital to raise awareness of the increasing charging divide between those with access to off street charging and those who need to use the public network.

CEO Vicky Edmonds said: “Reducing VAT on public charging is a critical step but only if the cost saving are passed to the consumer – and good to see InstaVolt make that commitment here.”

But she also said further action was needed to get near price parity between a 7p/kW charge at home and up to 78p/kW on the public network.

“Making it easier to access cross pavement technologies, a bigger push on workplace charging – and getting a much better understanding of what is driving those high public charging costs are also vital.”