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FUEL CRISIS: Government DISMISSES calls for fairer priced public electric vehicle chargepoints

The Government has dismissed calls for fairer pricing at public electric car chargepoints during the ongoing fuel crisis.

The RAC and the FairCharge campaign group were both disappointed with the Government’s stance to continuing with the higher 20% tax rate on public EV charging, compared to the standard 5% rate applied to domestic electric usage.

Taxi drivers and other motorists without access to home chargers rely on public chargepoints to make that move to greener vehicles and improve air quality in their area.

According to a Taxi and Private Hire Licensee Customer Satisfaction Survey (CSS), conducted by regulators TfL, nearly half (47%) of taxi drivers kept their vehicle at home on their driveway and a further 9% parked their taxi in a garage at home.

44% of those surveyed do NOT have the capability to install a home vehicle charging unit.

RAC Head of Roads Policy Nicholas Lyes said: “It’s disappointing the Government appears to be closing the door on fairer taxation for electric vehicles. The real issue is that those EV owners without driveways will be hugely dependent on public chargepoints, so it cannot be fair they are effectively being hit with a much higher rate of taxation than those that can charge at home. If the Government wants to make electric vehicle ownership truly universal, it needs to rectify this anomaly quickly.”

Quentin Willson, Founder of the RAC-backed FairCharge campaign, said: “With the huge windfall in Treasury receipts because of higher oil and fuel prices there’s plenty of fiscal room to bring VAT on public charging down from 20% to 5%. For those without driveways or parking spaces the 20% VAT levy will mean millions of voters will be excluded from driving an EV. This is a massive Treasury policy blunder with serious societal implications.

“FairCharge has worked out that at the current rate of EV adoption, lowering the VAT on public charging would cost just £14 million. That’s a tiny raindrop echoing in an ocean.”

Helen Whately MP, Exchequer Secretary (HM Treasury), said: “In order to keep costs down for families, the supply of electricity for domestic use attracts the reduced rate of VAT (five per cent).

"Electricity supplied at EV charging points in public places is subject to the standard rate of VAT (twenty per cent). The Government has not specifically introduced a reduced rate for charging EVs at home. However, the practical challenges of differentiating between the electricity used at home for general domestic purposes, and electricity used to charge EVs currently mean that the reduced rate is effectively being applied to EV home-charging.

“Applying the reduced rate of VAT to electricity supplied at EV charging points in public places would come at a cost. VAT makes a significant contribution towards the public finances, raising around £130 billion in 2019/20, and helps fund the Government's priorities including the NHS, schools, and defence. Any loss in tax revenue would have to be balanced by a reduction in public spending, increased borrowing or increased taxation elsewhere.

“The Government has no current plans to review the current rate of VAT applied to EV charging.”


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