Treasury blocks ministerial proposal to cut public EV charging VAT to 5%

The UK Treasury has rejected a plan by ministers to reduce VAT on public electric vehicle charging from 20% to 5%, according to The Guardian. The proposal aimed to align public charging costs with the 5% VAT rate already applied to domestic electricity, including home EV charging. The decision maintains the current pricing disparity between home and public charging infrastructure.

Why it matters: The VAT gap makes public charging significantly more expensive than home charging, potentially deterring EV adoption among drivers without off street parking and affecting utilisation rates at public charge points. Charge point operators and local authorities planning public networks must continue pricing strategies around the 20% VAT burden, which impacts business cases for new installations.