Electric car drivers demand huge VAT cut on public charging costs

Electric car drivers demand huge VAT cut on public charging costs

09/01/2022

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A handful of motoring organisations are urging the Government to cut costs for electric car drivers to help them deal with the increasing energy prices. Green Alliance, Transport & Environment and New AutoMotive argue that the Government is punishing EV drivers who do not have access to home charging.

Most home chargers attract a rate of five percent VAT, while public chargers cost more with a 20 percent VAT rate levied onto them.

By bringing VAT on public charging down to five percent, as it is for home charging, lower earners could save money, the organisations argue.

It is also thought the move would provide a massive boost to those looking to switch to electric vehicles.

Some home car charging points, such as Octopus Go, offer electricity that’s over 75 percent cheaper than public charging.

Data suggests that one in three electric car drivers are dependent on the public network for charging.

The number of public charging points have increased dramatically in recent years, but this has been much slower outside of London.

Helena Bennett, head of climate policy at Green Alliance, said: “Electric cars shouldn’t just be for people with the space and capability to charge from home. 

“We shouldn’t be saddling electric car drivers without home charging with higher costs.

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“The Government needs to ensure public charging points are readily available across the country and are able to provide affordable electricity for all drivers.”

The policy is part of a set of proposals by Green Alliance to reform the tax system, reduce the cost of living and drive investment in green technologies that lower inflation.

Last week, Ofgem raised the energy price cap by 80 percent, taking average gas and electricity bills to £3,549 from October.

The RAC predicted that home charging would get more expensive, although it is still “good value” compared to a petrol or diesel car.

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Ben Nelmes, head of policy at New AutoMotive, said the Government needed to intervene to help protect drivers from soaring costs.

He added: “One of the things that consumers most love about electric cars is how cheap they are to run, but an unfair tax regime exacerbated by rising electricity prices risks undermining the financial benefits of switching to an EV.

“Availability of public charging is as important as the cost; motorists should be able to plug in when and where they need to. 

“The UK has a fast growing public charge point network, but more needs to be done to ensure everyone has a basic level of access.”

Public First research for Green Alliance found that 65 percent of the public were in favour of increasing the availability of public charge points, with only seven percent opposed.

As part of the research, participants were asked about their attitudes towards EVs, with one saying they did not have the capability to install a charger in their home.

Another participant, from Oxfordshire, said they were “desperate” to get an EV, but could not install an energy source because they live on a private road with a “dead end”.

Ralph Palmer, EV and fleet officer at Transport & Environment, said it was a “clear win-win” for the Government to help drivers get into EVs.

But, he acknowledged that people on lower incomes and van drivers are much less likely to be able to charge at home.

He added: “[They] are unfairly hit with much higher taxes to charge on the public network.”

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