Public charging tax will slow EV switch – The AA
The AA is urging the government to cut public charging tax from 20% to five at the Spring Statement to boost EV sales.
This comes after its EV Recharge Report for February revealed that EV drivers could save £4.80 per charge at ultra-rapid chargers if VAT was reduced.
Off peak ultra-rapid charging costs are already 2p per mile cheaper than petrol, after recent increases at the pumps, but the introduction of car tax (VED) for electric vehicles from 1 April 2025 could negate any potential savings and put prospective EV drivers off.
VED will be retrospectively applied to EVs that were registered before the introduction of rates, meaning even EVs registered before 1 April will be liable for the £195 annual tax.
On top of this, any EV valued over £40,000 that is registered on or after 1 April 2025 will also incur the expensive car supplement rate of an extra £410 a year for five years.
Jack Cousens, head of roads policy for The AA, said: “The Chancellor has the opportunity to help the transition to electric cars by making some positive fiscal choices on Wednesday.
“Cutting VAT to match the domestic rate of five per cent will help households without dedicated off-street parking avoid the so called ‘pavement tax’. As well as saving drivers nearly £5 a charge, it would encourage those changing their car to opt for one with a plug.
“As most private car buyers opt to buy a used car, the introduction of VED at the full rate from 1 April could have a negative impact on the future of EV ownership. Drivers tell us that incentives are still required at this early stage of adoption.
“While all should pay vehicle tax, a discounted rate for EVs would make buyers take notice before spending their hard-earned cash.”
