Specialists demand car tax VAT rule is scrapped with certain drivers ‘penalised’
Experts have called for an immediate cut to a crucial car tax charge which is "penalising" motorists without a driveway or garage.
The Association of Fleet Professionals (AFP) wants to see “consistent VAT treatment” with the so-called ‘pavement car tax’ scrapped.
Under current rules, electric car owners who top up at public charging bays are issued a 20 percent VAT fee compared to just five percent for those topping up at home.
It means motorists are penalised for not having access to off-street parking and charging plugs at home which can be impossible for those living in flats.
The AFP wanted “review is overdue” with current VAT rules around electricity years before EVs hit the mainstream.
The Society of Motor Manufacturers and Traders (SMMT) and the AA are among industry leaders also calling for these changes.
The AFP’s Tax and Regulation Manifesto report read: “The VAT rate for public charging was set long before the widespread introduction of electric vehicles and a review is overdue.
“We would like to see a consistent VAT treatment for charging EVs whereby the current 20 percent VAT rate for public charging is reduced to five percent in line with home charging.
“Having a higher rate for public charging is penalising drivers who can’t charge at home twice – not only are they paying a premium for the electricity at public charge points, but they are also paying a higher rate of VAT.”
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Alongside the move, the AFP has also called for fresh legislation to stop landlords from blocking the installation of charge points for tenants.
They warned this was “hampering the uptake of electric vehicles” and forcing motorists in rented accommodation to use costly public charging bays.
The AFP is also pushing for an axe of VAT on home charging installation costs to make the technology affordable for all who own electric vehicles.
The report added: “Home charging should be encouraged wherever possible and thus the installation of home chargers should be as cost-effective and easy as possible.
“Removing VAT from home charger installations reduces the cost and makes it more attractive.
“Not only is home charging the most convenient and least costly option for most, from a safety perspective, it also stops any risks in terms of drivers hanging charging cables out of the windows if they attempt to charge at home without a home charging unit!”
