Venson: UK EV Drivers Seek VAT Cut on Public Charging
A study by Venson Automotive Solutions has revealed strong public support for reducing the Value Added Tax (VAT) rate on EV public charging.
According to the research, 61% of motorists back eliminating the current 20% VAT rate on public charging, while 57% favour introducing a standardised lower rate. A stark discrepancy exists between home and public charging, with home charging benefiting from a lower 5% VAT rate.
The debate over VAT rates on EV charging has gained momentum as MPs prepare to discuss a private member's bill to eliminate additional costs at public charging points. Many industry experts and fleet operators argue that a policy shift is necessary to ensure fair and consistent pricing for all EV users.
A distinct cost disparity
Beyond VAT, there is a considerable difference in electricity supply charges. According to Kerbo Charge, an off-peak home charging rate of US$0.13 per kWh is significantly cheaper than a public charging station at USD 0.71 per kWh, representing a 450% increase.
The discrepancy is even greater when using rapid public charging stations, where the cost difference reaches 690%.
Such disparities create financial barriers to EV adoption, particularly for those who do not have access to home charging. Many drivers, especially those living in urban areas without private driveways, have little choice but to rely on costly public charging infrastructure.
Rising costs for EV owners from April
As of 1 April 2025, the UK's financial burden on EV owners will increase due to changes in Vehicle Excise Duty (VED). Owners of zero or low-emission cars, vans and motorcycles will need to pay the same VED rates as petrol and diesel vehicle owners.
The standard rate will rise from US$245 to US$252 and newly-registered EVs will be subject to a first-year VED rate of US$11. Furthermore, the US$550 annual surcharge for vehicles costing more than US$51,700 will remain, affecting many EV models. The changes will impact both private and company car owners, further complicating the financial appeal of EV ownership.
In recent LinkedIn post, Mike Hawes, CEO at the Society of Motor Manufacturers and Traders, stressed: "Exempting EVs from the VED Expensive Car Supplement, due to apply from April, would be a clear and sensible move as ploughing on with a measure that treats EVs as luxuries – rather than fundamental to mobility and decarbonisation – risks pulling the handbrake on demand just as we need to accelerate.”
Public charging accessibility remains a concern
Beyond cost considerations, access to charging infrastructure remains a key issue for prospective EV adopters.
The Venson survey found that 76% of drivers believe insufficient on-street residential charging exists.
The lack of accessibility is a long-standing challenge that local authorities and private charging providers have yet to address adequately. Without significant improvements in charging infrastructure, many drivers may be deterred from switching to EVs.
Industry leaders advocate for policy change
Simon Staton, Client Management Director at Venson Automotive Solutions, has called for decisive government action to reduce VAT on public charging and improve accessibility.
"Businesses are eager to see MPs pass the proposed bill to reduce VAT on public charging," Simon notes. "A standardised approach to VAT for home and public charging will enable businesses and individuals to make a clearer assessment of the cost of owning an EV, crucial in a constantly challenging economic climate."
Simon goes on to highlight the need for further policy decisions following the government's recent consultation on zero-emission vans: "Actions that help to remove barriers to EV adoption, particularly for 4.25-tonne vehicles, will all help to support organisations transitioning to a greener fleet."
With growing support for VAT reductions and increasing financial pressures on EV owners, the UK Government faces mounting pressure to implement policy changes that support the transition to EVs.
As discussions continue in Parliament, fleet operators, private motorists and industry leaders will be closely watching for developments that could shape the future of EV adoption in the UK.
Drawing lessons from Norway
Norway is currently the global leader in the adoption of EVs. In 2024, nearly 89% of all new passenger cars sold in Norway were fully electric, with some months reaching as high as 98%.
The UK government stands to gain valuable insights from Norway's approach to EV adoption, which policy consistency, strong financial incentives and extensive charging infrastructure have marked.
Norway's long-term strategy includes tax exemptions, subsidies and removing value-added tax on EVsāmeasures that have significantly boosted adoption rates. A similar fiscal framework could accelerate EV uptake in the UK.
Christina Bu, Secretary General of the Norwegian EV Association, reflects: "We have engaged in political advocacy related to both national and local measures for EV owners, taken the lead in establishing a good charging network and worked hard to maintain VAT exemptions and effective car taxes in each state budget."
Infrastructure development has been a key factor in Norway's success. With more than 27,000 public charging points serving a population of 5.5 million, the country has effectively mitigated range anxiety. The UK could benefit from prioritising rapid expansion of its charging network, particularly in urban areas and along major highways.
Furthermore, Norway's ability to maintain a stable EV policy across successive governments has fostered confidence among consumers and manufacturers. Cross-party consensus on long-term EV policies could provide the UK market with the same certainty level, ensuring sustained EV adoption growth.
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