A driveway rule that affects every homeowner and tenant in the UK has been blasted as “two-tier”, with experts warning the system “penalises” motorists. Electric car owners are forced to pay more to top up their vehicles at public charging bays than at driveways due to differences in VAT fees.
Those topping up on their own private land will pay just 5% VAT on their electricity, compared to 20% at a public charging point. It means motorists without access to off-street parking, such as those living in flats and apartments, are paying hundreds of pounds more to get behind the wheel.
Asif Ghafoor, CEO of charging station provider Be.EV has called out the rule, suggesting the costs could dent confidence in switching to electric models.
Speaking to Express.co.uk, Asif said: “The VAT gap still makes public charging unnecessarily expensive compared with charging at home, even though most drivers rely on a mix of options.
“It makes no sense that home electricity is taxed at 5% VAT while public charging is taxed at 20%, despite it being the same electricity from the same grid. The result is a two-tier system that penalises people without driveways and undermines confidence in the transition.”
According to analysis from Eon, motorists topping up a typical electric vehicle at a public charging station will pay around £1,561.56 per year. In comparison, standard home electricity rates will set road users back around £633.01, with some special EV tariffs likely to be even cheaper.
The Government has opened up a consultation into cross-pavement solutions, which could see changes to planning permission rules. It could allow homeowners and tenants to run EV cables under the pavement, cutting costs for electric car owners without driveways.
However, Asif has stressed that officials needed to take a look at VAT rates to ensure motorists were not being unfairly charged.
Asif added: “Both home and public charging must be affordable and accessible. That starts with VAT. The Government should accelerate talks to reduce the public charging VAT rate and ensure any cut is passed straight to the drivers, all while backing operators to invest and scale reliable public charging where it’s needed the most.”