HMRC to appeal ruling that could cut VAT on public EV charging to 5%

HM Revenue & Customs has confirmed it will appeal a tribunal ruling that could reduce VAT on public EV charging from 20% to 5%, keeping a key cost pressure in place for electric drivers.

The decision follows a case brought by Charge My Street, where a London tax tribunal found that public charging should be taxed at the lower 5% rate – the same as home electricity. Currently, drivers using public chargers pay 20% VAT, creating a clear cost gap for those without off-street parking.

For drivers, this comes at a crucial moment. New data from Auto Trader shows electric cars are now, on average, cheaper to buy than petrol equivalents – shifting the conversation away from upfront cost and towards day-to-day running costs.

That’s where public charging becomes critical. Around 40% of UK households rely on it, meaning higher VAT directly impacts affordability for a large share of drivers.

If the ruling is upheld, it could lower charging costs and support wider EV adoption. For now, however, the appeal means the focus remains on whether running costs, rather than vehicle prices, become the next barrier to switching.

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