Tuesday 5 March 2024

Spring Budget: Businesses call for VAT cut on EV charging

A group of businesses, including FairCharge, Auto Trader and E.ON, have urged the government to cut VAT on public electric vehicle (EV) charging in the upcoming Spring Budget.

In an open letter from FairCharge Founder Quentin Willson, sectors such as charging, automotive and power appeal to the Chancellor to implement the VAT reduction to support EV adoption and affordability.

The appeal highlights the unfairness of VAT on public charging for those without home charging options, the potential increase in EV adoption and the confidence boost for businesses and consumers following the 2030-2035 transition.

Quentin Willson, FairCharge Founder, said: "If the government is serious about wider EV adoption, they must revisit this out-of-date VAT legislation - written in the early 1990s before the arrival of electric cars - and make it fit for purpose.

"The cost to The Treasury would be very small compared to the hundreds of billions spent supporting fuel duty, but the benefit to EV drivers without private parking and to urban air quality would be significant and remove this unnecessary barrier to EV adoption."

Dev Chana, Managing Director E.ON 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."