Many drivers ‘disadvantaged’ with calls for ‘significant change’ to car tax rule
Drivers may be affected by a VAT tax rule with some motorists in the UK likely paying hundreds of pounds more every 12 months.
Certain motorists are being “disadvantaged” by a car tax rule slapping drivers with extra fees to use their vehicles, according to motoring specialists.
Electric car owners who are forced to top-up their vehicle at public charging bays pay 20 percent VAT on electricity compared to five percent for those who use home cables.
The ‘pavement tax’ means those without access to private driveways and charging facilities are charged more to run electric vehicles (EVs), than others.
It could be a major issue for motorists living in cities such as London where apartments and flats may not come with off-street parking to top-up.
The extra fees will add hundreds of pounds to yearly bills and could be a reason some motorists are not switching to the new models.
Speaking exclusively to Express.co.uk, Rebecca Trebble, chief customer experience officer at electric car charging specialists GRIDSERVE called for an immediate change.
Rebecca said: “GRIDSERVE supports the lowering of VAT on public charging to 5 percent, to be in line with the rate on home charging.
“This significant change would have a real and positive impact on EV ownership and would make it fairer on those without home charging.”
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The House of Lords Environment and Climate Change Committee also suggested the rate should be reduced in their latest EV report.
But in April the Government pushed back at the recommendation and confirmed there were “no current plans” to change the fee although this would be kept “under review”.
They explained: “Whilst this relief was not designed or introduced for charging EVs at home, this relief applies for all uses of domestic energy. Electricity supplied at EV charging points in public places is subject to the standard rate of VAT (20 percent).
“Expanding the VAT relief already available would impose additional pressure on the public finances to which VAT makes a significant contribution.”
However, Rebecca stressed that updating the rules could have a major impact on the EV market by helping to “remove barriers” for those on the fence.
She told Express.co.uk: "We know from many of our customers at Electric Forecourts, and across the GRIDSERVE Electric Highway, that reliable public infrastructure is key to them being able to switch to electric in the absence of home charging, but they can be disadvantaged by the higher VAT.
"We need to make sure that any barriers to EV adoption are removed to ensure we reduce emissions in the shortest possible timeframes, to tackle the climate emergency."
