Andy Burnham’s recent decision to reduce VAT on electricity bills aims to support electric vehicle (EV) drivers, but it may unintentionally disadvantage those who park and charge on public roads. The new Labour Party Prime Minister’s VAT cut benefits EV owners charging at home through private chargepoints, leading to lower energy bills for those with drivepoints installed on their properties.
However, drivers without driveways, who rely on public charging points, won’t see the same savings. According to EDF, the UK currently hosts over 75,000 public EV charging devices, including around 14,448 rapid chargers delivering speeds of 50kW or more. Charging costs on these public networks vary significantly.
EDF highlights that pay-as-you-go (PAYG) charges for Slow and Fast chargers average about 53p per kilowatt-hour (kWh), roughly equating to 16p per mile. Meanwhile, Rapid and Ultra-Rapid chargers average a steep 81p per kWh, or approximately 24p per mile. David Martell, CEO of home wallbox provider Andersen, notes that for high-mileage drivers, this VAT cut could save around £40 annually, emphasizing the importance of the government’s direction despite modest immediate gains.
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Gurjeet Grewal, head of Octopus Electric Vehicles, praised the move, stating that “the financial case for going electric has never been stronger.” Transport Secretary Heidi Alexander described the VAT cut alongside a national bus fare cap as a clear “signal of intent” from Burnham’s government during an interview on BBC Radio 4’s Today programme.
Yet not everyone welcomes the change unconditionally. Victoria Edmonds, CEO of the campaign group EVA England, pointed out that the transition to EVs remains unfair for drivers unable to charge at home. They bear higher costs due to “significant taxes, levies and electricity costs faced by charge point operators,” which hinder lowering public charging prices.
Professor David Bailey of Birmingham Business School criticized VAT on public charging as a “tax on circumstance,” calling for an end to what he terms the “EV charging tax divide.” His comments highlight a growing call to create a more equitable system that supports all EV users, regardless of their ability to charge at home.