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A First-tier Tribunal ruled last month that public EV charging should be taxed at the domestic 5% VAT rate rather than the 20% rate currently applied by HMRC, following a case brought by community operator Charge my Street with advice from Deloitte. The ruling hinges on existing VAT law stating that provision of less than 1,000 kWh per month to a person at any premises counts as domestic supply, a threshold impractical for EV drivers to exceed. HMRC is considering the decision and potential next steps, including a possible appeal.

Why it matters: The ruling could materially improve the economics for UK charge point operators, many of whom currently operate at a loss, by reducing the VAT burden on public charging sessions. If upheld, the 15 percentage point VAT reduction would flow through to either improved operator margins or lower consumer pricing, potentially accelerating infrastructure deployment.

The First-tier Tribunal has ruled that the 5% domestic VAT rate, rather than the standard 20% rate, should apply to public EV charging when a driver uses less than 1,000 kWh per month at a particular premises. The case was brought by community charge point operator Charge my Street, supported by tax advice from Deloitte, which argued that existing VAT law already covered this scenario. HMRC's arguments against the lower rate were rejected by the tribunal, which heard the case in October and published its decision this week.

Why it matters: The ruling could significantly reduce operating costs for CPOs and make public charging more affordable for drivers without home chargers, potentially accelerating EV adoption among those reliant on on street infrastructure. Charge point operators may need to review their VAT accounting and pricing structures to reflect the lower rate for typical usage patterns.