The AA is urging the Chancellor of the Exchequer to cut VAT on public charging from 20% to 5% at the Spring Statement to help boost electric vehicle uptake.
The AA EV Recharge Report for February 2025 shows that while prices were frozen across the board, EV drivers could save £4.80 per charge at ultra-rapid chargers if VAT was slashed.
It follows the long-running campaign by FairCharge, which has highlighted the disparity between the cost of public EV charging and at-home domestic charging.
The news also comes as pump prices for petrol moved towards 140 pence-per-litre, meaning that ultra-rapid, off-peak charging was 2 pence-per-mile cheaper.
Following the publication of The AA’s latest EV report, prospective EV owners told The AA that incentives to help them buy and own a vehicle.
But the introduction of car tax (VED) for electric vehicles from 1 April 2025 could hamper owners of new and used EVs. VED will be retrospectively applied to EVs that were registered before the introduction of rates.
Any EV that was registered before 1 April will now be asked to pay the standard rate tax, currently £195 a year. As a result EV owners have been taxing their cars early at the existing annual cost of £0 to defer paying until March 2026.
On top of the standard rate, any EV registered on or after 1 April 2025 with a list price in excess of £40,000 will also be liable to pay the expensive car supplement rate of an extra £410 a year for five years after the car’s first 12 months on the road.
While The AA believes all vehicles should pay VED, it said electric vehicle tax should be set at a discounted rate to incentivise their purchase.
Jack Cousens, head of roads policy for The AA, said:
“The Chancellor has the opportunity to help the transition to electric cars, by making some positive fiscal choices on Wednesday.
“Cutting VAT to match the domestic rate of 5% will help households without dedicated off-street parking avoid the so called ‘pavement tax’. As well as saving drivers nearly £5 a charge, it would encourage those changing their car to opt for one with a plug.
“As most private car buyers opt to buy a used car, the introduction of VED at the full rate from 1 April could have a negative impact on the future of EV ownership. Drivers tell us that incentives are still required at this early stage of adoption.
“While all should pay vehicle tax, a discounted rate for EVs would make buyers take notice before spending their hard-earned cash.”
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