1:41 pm, March 4, 2024
Carmakers and industry heavyweights have signed a letter calling the chancellor to slash VAT on electric car charging.
Currently, electric car owners who charge at home pay 5% on their energy bill. But those without driveways are being forced to rely on public chargers and are whacked with the full 20% VAT rate.
The price difference between home and public charging is now a major barrier to EV adoption, the signatories have said.
The letter was organised and delivered to Jeremy Hunt by FairCharge, the lobby group founded by motoring journalist Quentin Willson.
One signatory is Auto Trader which has calculated that drivers charging off peak at-home could save £865 annually compared to petrol or diesel cars. However, a driver using public rapid chargers would pay £264 more over a year.
Others include JRL, Stellantis, Polestar, Autocar Magazine, Greenpeace and energy provider E.ON.
Willson said: ‘If the government is serious about wider EV adoption, they must revisit this out-of-date VAT legislation – written in the early 1990s before the arrival of electric cars – and make it fit for purpose.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, MD of E.ON Drive Infrastructure said a ‘fairer system’ 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’.
Auto Trader’s Ian Plummer branded the anomaly as ‘unfair’, adding: ‘It’s time for the Treasury to address this injustice and give electric vehicles the best chance of widespread adoption, rather than remaining the preserve of the wealthy.’
In an interview with Car Dealer last week about Polestar’s new £750m investment, its UK boss, Jonathan Goodman, said the UK is ‘doing less than any other country in Europe’ in tempting people to buy a new electric car.
The open letter comes off the back of calls from the Society of Motor Manufacturers and Traders to use Wednesday’s Budget to supercharge EV car sales.
SMMT chief Mike Hawes said: ‘The Budget is a crucial opportunity to re-energise the EV market, with fair taxes for a fair transition.
‘The chancellor must end the perverse fiscal system that discourages drivers from moving away from fossil fuels and send a clear signal that the time to go electric is now.’
