VAT – A Call For Action

As the price of electricity continues to rise, it clearly impacts the cost of running an EV. Mer has signed a letter to the Chancellor and the Transport Secretary calling for VAT on electricity from public charging to be brought into line with domestic charging. UK MD, Karl Anders, sets out Mer’s position on the subject.

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The price that EV drivers pay for public charging differs from that of home charging. One of the main reasons for this is the discrepancy between the two VAT levels that are applied. At present, EV drivers who don’t have access to charging at home pay four times more tax on the electricity they use from public charge points. That’s because VAT on domestic electricity is 5% and at public chargers it is set at 20%.

Mer is one of the signatories of a letter sent to the Chancellor of the Exchequer and the Transport Secretary – at the time Kwasi Kwarteng and Anne-Marie Trevelyan respectively – calling for the level of tax to be 5% across both scenarios. I signed this on behalf of Mer alongside the campaign group, FairCharge, and 22 fellow senior figures from the EV industry. You can read the letter and view the other signatories here.

The arguments for reducing VAT at public charge points that we outlined in the letter are compelling. We wrote to the Chancellor to highlight the threat that high and volatile electricity costs are having on the take up of EVs. This puts the Government’s stated ambition to decarbonise transport with the transition to electric vehicles at risk. It also threatens to derail the Government’s plans to develop a comprehensive public charging network.

For the EV driver, applying the domestic rate of VAT at public charge points will go a long way to reducing the cost of running an EV. It will remove some of the perceived barriers to adoption that are based on cost alone. In the face of the cost-of-living crisis, anything that helps consumers and makes EV driving more affordable is a good thing. At the moment, the artificial gap between charging facilities is huge and unnecessary. At Mer, we very much support a levelling of the rates and will be continuing to make the case to the new Chancellor and Transport Secretary.

You can get more details of the FairCharge campaign here and sign the petition to make EVs fairer and more affordable here, if you are inclined.

I am certain that there will be many more developments in this area over the coming months as the political turmoil we have been experiencing, hopefully, settles down. It’s a topic that we are keen to address to ensure we can give the best and simplest EV charging experience for drivers.