Autumn Budget 2026: VAT reduction on household electricity extended until July 2027

Electric vehicle drivers who charge at home are set to benefit from an extension to the Government’s temporary VAT cut on domestic electricity, but businesses and drivers reliant on public charging will continue to face a significant cost disparity.

Chancellor John Healey confirmed in today's Autumn Budget that the temporary VAT reduction on household electricity will remain in place until 1 July 2027. The measure is expected to reduce the annual household energy price cap by around £50 from April 2027, offering some relief to EV owners charging at home.

However, public charging remains subject to the standard 20% VAT rate, leaving drivers without access to off-street parking at a disadvantage.

The Government is exploring ways to narrow this gap, including allowing drivers using certain public chargers to access domestic electricity rates.

For fleet operators, charging access and location remain important considerations when assessing the true cost of transitioning to electric vehicles.

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