HMRC Appeals Tribunal Ruling to Keep EV Charging VAT at 20%
HM Revenue and Customs has confirmed it will appeal against a First‑Tier Tribunal ruling that would cut VAT on public electric vehicle charging from 20% to 5%.
The ruling, which followed a case brought by not‑for‑profit operator Charge My Street, found that applying the standard 20% rate was a strained construction of the VAT Act. Judge Harriet Morgan determined that electricity supplied through public chargers should qualify for the reduced 5% rate when a single user does not consume more than 1,000 kilowatt‑hours per month at a premises.
HMRC says it will appeal, maintaining that standard‑rate VAT applies to electricity supplied through public EV charging infrastructure.
For drivers, the stakes are high. Those with home driveways pay 5% VAT when charging at home, while the estimated 40% of UK households without off‑street parking face 20% at public chargers — four times the rate for electrically identical electricity. In some cases, running an EV on public charging alone can cost up to ten times more per mile than charging at home, undermining the economic case for switching from petrol and diesel.
According to charger‑mapping company Zapmap, the VAT differential currently nets the Treasury roughly £85 million a year. That figure is projected to rise to £315 million by 2030 and into the billions thereafter as the national EV fleet expands.
Against a fiscal backdrop strained by the Iran conflict and pressure to scrap a planned fuel‑duty increase, the government appears reluctant to surrender a growing revenue stream that could replace the £24.5 billion generated annually by fuel duty.
The appeal has drawn an unusually unified response from an industry often marked by commercial rivalry. Will Maden, director at Charge My Street, said about 40% of the UK population lack drives, making the transition to EVs a huge problem that is worsened by the added 20%. He added that the shift to EVs should be made as cheap as possible, calling it an environmental issue.
John Lewis, chief executive of charge‑point operator char.gy, described the appeal as a deeply disappointing decision that sends the wrong signal to millions relying on public charging. Lewis said his firm would pass any VAT cut straight to customers and criticised the government for maintaining a tax structure that makes public charging more expensive than necessary.
Tanya Sinclair, chief executive of Electric Vehicles UK, accused ministers of defending inequality by proxy, noting that drivers without off‑street parking already pay more to charge simply because of where they live. She argued that if the government is serious about EV adoption, it should not fight a ruling that would fix the most regressive charging cost.
Ginny Buckley, chief executive of Electrifying.com, questioned the political optics, saying that for a government that claims to stand up for working people, the decision to appeal flies in the face of that stance, hitting those without driveways hardest and making EVs more expensive to run than petrol in some cases.
Warren Philips, campaign lead at FairCharge, which has spearheaded the lobbying effort, called the appeal indefensible, stating that people unable to charge at home pay four times the VAT rate of neighbours for identical electricity, and that by appealing the government is telling 1.4 million current EV drivers and more than 30 million future switchers that it will go to court to keep public charging costs high.
The tribunal ruling currently binds only Charge My Street. Should HMRC’s appeal fail at the Upper Tribunal, operators across the sector could prepare claims for over‑paid VAT stretching back years, a liability that could run into hundreds of millions of pounds.
For the UK’s SME‑led charge‑point operators, many of them small founder‑led businesses already dealing with grid‑connection delays, planning bottlenecks and capital costs, the appeal represents more than a fiscal irritation. It is seen as a test of whether Whitehall is serious about the commercial foundations of the net‑zero transition, or merely content to talk about them.