EV ‘driveway divide’ increases to £200 as home electricity VAT drops to zero
EV charging industry and driver groups united in call to end the ‘pavement tax’ as it grows to £200 following the Prime Minister’s domestic electricity VAT cut
The difference in VAT a typical EV driver will pay on annual basis has grown to £200 depending on whether they can charge at home or not. The increase, a result of Andy Burnham’s first policy announcement as Prime Minister coming into effect on 1st October, means that whilst charging an electric car at home is subject to zero VAT, public EV charging remains subject to 20 per cent.
ChargeUK, the EV charging trade association, has coordinated a letter calling on the Prime Minister to end the divide, which affects the estimated 10 million households who cannot charge a vehicle at home. The letter, signed by industry and consumer driving groups including EVA England, EVA Cymru, The AA, Autotrader and the FairCharge campaign, argues that ending the divide would give millions more people the opportunity and confidence to make the switch to EV.
ChargeUK has calculated the VAT difference based on a typical EV driver using a mix of 80 per cent home charging and 20 per cent rapid compared to one solely using public charging, on an 80 to 20 per cent standard and rapid charging mix. The driver with home charging’s total annual cost is over £1,000 lower than the public charging reliant driver, with VAT now contributing £200* to the difference.
Shane Brennan, chief executive officer, ChargeUK said:
“Cutting VAT on home electricity is the right call at the right time, it will relieve some pressure on what will be a tough winter for energy consumers, including EV drivers.“However, it will also entrench the driveway divide for those current and want-to-be EV drivers who pay the full 20 per cent VAT to charge their cars at the worst moment.“With diesel prices topping £2 a litre this week, and petrol not far behind, encouraging all drivers to go electric is the right thing to do, let’s make it fair and accessible for all.”
Earlier this year a First-tier Tribunal between community charging operator Charge My Street and the HMRC ruled that public EV charging should already qualify for the ‘de minimis’ lower rate of VAT, then 5 per cent. HMRC then confirmed that its position that 20 per cent applies remained unchanged and was appealing the decision. As such applying the lower VAT rate to public EV charging would constitute minimal to no legislative change. ChargeUK is calling on government to cease appealing the decision and equalise VAT on public EV charging with home.
Vicky Edmonds, chief executive officer, EVA England said:
“VAT relief on home electricity will provide welcome support with household energy bills. But for EV drivers, it just risks widening the existing ‘charging divide’ between those who can charge affordably at home and those who depend on the public network. Over three quarters of EV drivers believe the high cost of public charging is now the greatest barrier to owning an EV.
“The Government must take urgent action to close that charging divide, and reducing VAT on public charging would be a simple and visible first step towards doing so. At a time when more drivers are being encouraged to switch to electric, it is vital that whether a household can afford to do that is not determined by whether or not you have a driveway. The transition must work fairly for every driver, whatever their circumstances.”
ChargeUK has also estimated the cost in VAT receipts to treasury to around £180 million annually based on 2025 charging volume with potential to rise to around £260 million on forecasts for 2026 and £354 million in 2027**. Considerably lower than the £1.1 billion Treasury is forecast to tax electric vehicle drivers in 2028/29 through the introduction of the 3p per mile Electric Vehicle Excise Duty (eVED).
ChargeUK members are highlighting the VAT disparity with various activities around the date. Fastned is turning all of its 41 charging hubs across the UK, into a “nationwide driveway for the day”, by giving motorists £25 of free charging credit to highlight the growing driveway divide created by the VAT gap between home and public EV charging. Meanwhile GRIDSERVE is cutting the price of its charging network by 20% for one day only on 1 October, giving drivers a real-world demonstration of what lower taxation on public EV charging could mean for the cost of driving electric.
The full list of signatories is:
Shane Brennan, CEO, ChargeUK
Edmund King OBE, president, the AA
Petar Georgiev, VP Corporate Affairs & Sustainability, AMPECO
Ian Plummer, Chief Customer Officer, Autotrader
Guy Bartlett, CEO, Believ
Toby Poston, CEO, BVRLA
Chris Pateman-Jones, CEO, Connected Kerb
Paul Bevan, Cadeirydd/Chair, EVA Cymru
Vicky Edmonds, CEO, EVA England
Neil Bowater, CEO, EV Smart (UK) Ltd
Francis O’Donnell, Head of E-mobility, ESB Energy
Warren Philips, Head of FairCharge
Tom Hurst, UK Country Director, Fastned
Rebecca Trebble, Chief Customer Officer, GRIDSERVE
Andreas Atkins, Country Manager UK & Ireland, IONITY
Ian Johnston, CEO, Osprey Chargin
Melanie Lane, CEO, Pod
Deepa Chandrasekaran, Managing Director, Source
Melanie Shufflebotham, COO and Co-founder, Zapmap
Ends
Notes to editors
*ChargeUK analysis comparing annual VAT for an 80/20 per cent home/rapid (£71.88) with 80/20 per cent public standard/rapid (£273.52) blend for a typical EV annual mileage of 10,054, highlighted in table below.
Sources:
Prices: Zapmap price index August 2026 https://www.zapmap.com/ev-stats/charging-price-index
Efficiency: Government advisory rates https://www.gov.uk/guidance/advisory-fuel-rates
Annual mileage: RAC Foundation, July 2025 https://www.racfoundation.org/media-centre/at-least-one-in-twenty-car-miles-driven-is-now-zero-emission
Charging type | Price per kWh (£) | Effective VAT per kWh (%) | VAT per kWH (£) | Annual mileage | Efficiency (miles per kWh) | Annual total cost | Annual VAT |
Home price cap pre 1 Oct | £0.26 | 5% | £0.01 | 10,054 | 3.59 | £731.23 | £34.82 |
Home off peak pre 1 Oct | £0.08 | 5% | £0.00 | 10,054 | 3.59 | £224.04 | £10.67 |
Home off peak from 1 Oct | £0.08 | 0% | - | 10,054 | 3.59 | £224.04 | - |
Home price cap from 1 Oct | £0.26 | 0% | - | 10,054 | 3.59 | £737.11 | - |
Public rapid | £0.77 | 20% | £0.13 | 10,054 | 3.59 | £2,156.43 | £359.40 |
Public standard | £0.54 | 20% | £0.09 | 10,054 | 3.59 | £1,512.30 | £252.05 |
80/20 public standard/rapid | £0.59 | 20% | £0.10 | 10,054 | 3.59 | £1,641.13 | £273.52 |
80/20 price cap home/rapid pre 1 Oct | £0.36 | 9.8% | £0.04 | 10,054 | 3.59 | £1,016.27 | £99.74 |
80/20 off peak home/rapid post 1 Oct | £0.22 | 11.8% | £0.03 | 10,054 | 3.59 | £610.52 | £71.88 |
**Sources for Treasury calculations
Prices as above, in addition to:
2025 public charging split Zapmap and GFI utilisation report https://mailchi.mp/zapmap/gfi_utilisation_report_edition_3_2026
Future charging demand: LCP Delta, Powering a decade of growth https://www.lcp.com/en/insights/publications/powering-a-decade-of-growth-the-economic-impact-of-uk-ev-charging
