The UK electric vehicle (EV) charging sector and wider industry has responded to the HMRC decision to appeal the Tax Tribunal ruling on 5% VAT for public charging.
It follows community benefit society Charge My Street winning its appeal on whether public electric vehicle (EV) charging should qualify for the reduced 5% VAT rate at the First-Tier Tribunal in February.
Charge My Street won the appeal based on the assumption that public charging should fall under the “de minimis” provisions, allowing a 5% VAT rate on small-scale supplies of electricity supplied for domestic consumption.
Currently, public charging is taxed at 20% VAT while domestic charging is at 5%, created a wide cost disparity between those able to charge at home and those who cannot.
But despite the ruling, the UK Government has now decided to appeal against it.
Vicky Read, Chief Executive of ChargeUK, said it was “a disjointed and disappointing decision from government”.
Vicky Read added:
“On the same day it commits to doubling down on clean power and electrification, HMRC appeals against a legal ruling which could cut the cost of EV charging for millions.
“Interest in EVs is surging as drivers look to shield themselves from volatile petrol prices. But for the many who cannot charge at home that equation is still not straightforward – addressing the pavement tax would help make it so.
“We urge that as government progresses its review of the cost of public EV charging, equalising VAT should remain on the table regardless of this ruling.”
John Lewis, CEO, char.gy also said the government decision was “deeply disappointing”, and “one that sends entirely the wrong signal to the millions of people who rely on public charging”.
John Lewis said:
“The government talks about accelerating EV adoption, yet is actively choosing to maintain a tax structure that makes public charging more expensive than it needs to be and undermines the transition. char.gy stands ready to pass on any VAT saving to our customers the moment the government does the right thing.
“The question is: what is the government waiting for?”
Tanya Sinclair, CEO, Electric Vehicles UK added that the government was “choosing to defend […] inequality”.
“Drivers without off-street parking already pay more to charge simply because of where they live. HMRC appealing this ruling is the government choosing to defend that inequality.
“If you’re serious about EV adoption, you don’t fight the ruling that would fix your most regressive charging cost. You let it stand. Their actions don’t match the narrative.”
Ginny Buckley, CEO, Electrifying.com said:
“For a government that talks about standing up for ‘working people’, the decision to appeal this ruling flies in the face of that. Ministers are doubling down on a system that penalises millions of drivers who rely on public charging.
“Those drivers can pay up to ten times more to charge an electric car than someone with a driveway – and in some cases, that makes EVs more expensive to run than petrol.
“This hits those without driveways the hardest, making it more expensive for them to switch and if the government is serious about making EVs affordable, it cannot allow a two-tier system where access to cheaper, cleaner driving depends on what type of property you have.”
Warren Philips, Campaign Lead, FairCharge, said:
“FairCharge has led on this issue, but consumers, industry and MPs alike have always known it was wrong. Charging people more because they depend on public infrastructure was wrong in principle, and the tribunal confirmed it. People unable to charge at home pay four times the VAT rate of their neighbours for identical electricity, a failing that persisted long after the legal basis was challenged.
“By appealing, the government is telling 1.4 million current EV drivers, and more than 30 million who will have to switch, that it is willing to go to court to keep public charging costs high. It should accept the ruling and work with consumers and industry to put this right.”
Luke Templer, Believ CFO, said:
“Believ is hugely disappointed that HMRC has chosen to appeal. The tribunal’s initial ruling is an encouraging step towards fixing the VAT imbalance that means drivers who can’t charge on a driveway often pay more to go electric.
“By appealing a clear and fair ruling, HMRC is prolonging uncertainty in the sector and sending the wrong message to drivers when they should be encouraging them to switch. HMRC should be allowing the industry to move forward under the legislation as it stands, so we can build driver confidence, accelerate the EV transition and deliver cleaner air for all.”
Image courtesy of Green Car Guide
