Burnham VAT cut on domestic electricity to widen charging cost gap for drivers without driveways

Prime Minister Andy Burnham announced a six month removal of the 5 per cent VAT on household electricity bills from October, funded by £850 million from scrapping the ID cards scheme. The move will benefit existing EV owners who charge at home but widens the cost gap for the nine million UK households without driveways, who already pay four times more to charge via the public network taxed at 20 per cent VAT. Industry experts warn the measure amplifies the VAT penalty for around a third of UK households reliant on public infrastructure.

Why it matters: The policy deepens the financial divide between home and public charging, potentially dampening demand for public network expansion and making the business case harder for charge point operators targeting kerbside and destination sites. Procurement teams may face weaker utilisation forecasts in areas with high proportions of street parked vehicles.