The cost to charge an electric vehicle with InstaVolt could soon increase after HMRC clarified that the standard rate of VAT (20%) will now apply to all public charging points.
The news was announced through a government 'Brief' which confirmed that the 'de minimis' provisions, which allowed for a reduced rate of VAT of 5% to be charged at some public charging facilities, will now no longer apply for firms like InstaVolt.
The change will not affect most chargepoint companies who already apply the standard 20% VAT rate to their fees.
Adrian Keen, CEO of InstaVolt, said: "This is extremely disappointing and immediately increases the cost to InstaVolt by 15%, which we have to reluctantly pass onto our customers.
"With the announcement, we have no option but to apply the additional VAT to our base rate.
"I'd like to reiterate that running an EV is still much cheaper than a petrol or diesel vehicle, with the cost-per-mile of electricity being over 25% cheaper than running a fossil fuel vehicle.
"We will continue to engage with the Government to reduce the rate of VAT on public EV charging to 5% in line with domestic energy tariffs, and be assured that HMRC reverses its position, we will immediately reduce our price."