In a move criticized by automotive experts, the government has opted against introducing significant changes to car tax policies. This decision has been met with disapproval, particularly regarding the lack of adjustment to VAT rates for electric vehicle (EV) charging.
Bradley Post, Managing Director of RIFT, has condemned the government’s refusal to reduce VAT on public EV charging stations, labeling it a “considerable step backwards” in encouraging the transition to more environmentally friendly transportation. He emphasizes the impracticality of promoting EV adoption while simultaneously imposing higher fees for charging in public spaces.
Under the current tax structure, those utilizing public charging bays are subject to a 20% VAT, a significant increase compared to the mere 5% charged for home charging. This disparity disproportionately affects drivers without access to off-street parking, forcing them to pay hundreds of pounds more to operate their vehicles. Post’s stance aligns with the findings of a House of Lords Environment and Climate Change Committee report, which called for updates to equalize VAT rates for EV charging. However, the government has declined to implement these recommendations, citing the broad-based nature of VAT and potential strain on public finances.
The Society of Motor Manufacturers and Traders (SMMT), along with the AA, has been among the industry leaders advocating for VAT rate equalization. The AA’s Motoring Manifesto includes this issue as a key campaign point. Jack Cousens, Head of roads policy for the AA, expressed disappointment over the government’s decision but reaffirmed their commitment to advocating for this change in the lead-up to a General Election.
