A court has ruled that a common electric car rule that affects driveways should change, in a potential blow to the Government. EV experts Charge My Street have won their appeal against HM Revenue & Customs (HMRC), in a landmark case around public electric car charging stations.
HMRC requires charge point operators to slap drivers topping-up at public stations with a 20% VAT, while domestic off-street parking is liable to 5% fees. However, Charge My Street argued that community-led EV charging should fall under the different provisions and be charged at the 5% VAT rate issued to those with driveways.
The tax tribunal agreed with Charge My Street’s approach, with the move expected to have wide-ranging implications for EV drivers.
Daniel Heery, director at Charge My Street, said: “This is a hugely important outcome - not just for Charge My Street, but for communities across the UK who rely on affordable, local EV charging.
“Our mission has always been to make neighbourhood charging accessible to everyone, and today’s ruling supports that mission. Lower VAT on charging improves fairness and helps accelerate the shift to cleaner transport for all.
“We rely on investment from ordinary EV drivers to extend our charge point network, and this result helps the commercial case for our current share offer.”
Charge My Street received advice from tax experts at Deloitte, who noticed that the existing VAT law says that the provision of less than 1,000kWh per month of electricity counts as ‘domestic’.
Deloitte believed this meant that 5% rate should already apply to public electric car charging, provided fees were still under that level.
Daniel Barlow, Tax Partner at Deloitte, said:“The First-tier Tribunal found that, under existing UK law, drivers should be charged the 5% reduced rate of VAT when charging their electric vehicles at any public charging facility.
“Specifically, the Tribunal interpreted the de-minimis provision in Note 5(g), Group 1, Schedule 7A, VAT Act 1994 as applying the 5% reduced rate of VAT to supplies of electricity at public EV charging locations where the amount of electricity supplied is below 1,000 kilowatt hours per month per customer at each location.”
HMRC told Express.co.uk that it was “carefully considering the decision” and its “next steps”.
