Eon, The Renewable Energy Association and The RAC are among several organisations calling on the chancellor to slash VAT on public electric vehicle charging in the forthcoming budget.
Current rules mean that VAT is levied at 20% on public EV charge points compared to 5% for private ones.
An open letter to Jeremy Hunt, written by EV campaign group FairCharge founder Quentin Willson, describes the current VAT rules as an “unfair burden” on those without access to home charging.
The letter, which is also being supported by Auto Trader and Eon, states: “HMRC’s current tax policy is acting as a barrier to wider electric vehicle adoption, particularly for the 38% of the population without driveways and currently less able to charge at home.
“Because of ongoing volatility in the energy markets, charging at a public device compared to a domestic one – where VAT is levied at 20% compared to 5% – can currently be more expensive than filling up with petrol or diesel, and considerably more than the lowest night-time domestic electricity rate.
“For drivers who rely on public devices, these higher taxes are an unfair burden for those without access to home charging, and counters both the government’s levelling up and cleaner urban air ambitions.”
It added that at current rates of adoption the cost to the Treasury would be a “tiny fraction “of the more than £120 billion that has already been spent supporting lower fuel duty rates, but “would make a material and sustainable difference to charge point operators’ ability to offer more affordable public charging”.
It concludes by saying: “The VAT rules covering supplies of electricity were originally written in the early 1990s. They urgently need to be updated given that the growth of electric vehicles has become a global trend and is also essential to the delivery of the UK’s statutory requirement to reach net zero.
“The companies and individuals signing this letter urge you to remove this significant barrier to wider EV adoption and confirm that all public charging would be liable to the same 5% VAT rate as domestic supplies. This will help support the many existing and future EV owners who, through no fault of their own, are unable to charge at home.”
Commenting on the matter Dev Chana, managing director at Eon Drive Infrastructure, said: “Taxing EV drivers four times as much for using public chargers is effectively a tax on people who don’t have a driveway.
“A fairer system which charges the same rate of VAT wherever and whenever you charge your electric car would be a real consumer win during this cost-of- living crisis and would also help speed up EV adoption by taking away an unnecessary and unfair cost.”
Ian Plummer, commercial director at Auto Trader, said: “It is simply unfair that EV owners without driveways should have to pay more for the privilege of improving air quality.
“It’s time for the Treasury to address this injustice and give electric vehicles the best chance of widespread adoption, rather than remaining the preserve of the wealthy.”
A Treasury spokesperson said in response: “Since 2017 new registrations of electric vehicles are up 1,730%. To help continue the transition to net zero by 2035, we have invested over £2 billion to cut down purchase costs for drivers and to build the necessary infrastructure to support their usage, such as local on-street residential charging and targeted plug-in vehicle grants.
“The UK’s EV charging network continues to grow at pace – there are now over 50,000 public chargepoints, with 45% more than this time last year, putting the country on track to reach 300,000 chargepoints by 2030.”