Officials are considering reducing VAT on public EV charging from 20% to 5% to match home charging rates, addressing tax disparities. This follows concerns over a pay-per-mile scheme starting in 2028, aimed at ensuring EV adoption remains viable amid rising costs.
UK Government Considering VAT Cut on Public EV Charging
Public
United Kingdom
Author: Ema Stamenković
Category:
General information
Views:
121
Content accuracy validation date:
23.01.2026
Content accuracy validation time:
10:03h
Officials are exploring a reduction in VAT on public EV charging from 20% to 5%. This would align it with the reduced VAT rate paid by those who charge at home, eliminating the so-called “pavement tax” disparity.
The proposal, long campaigned for by the car industry, was mentioned as a possibility in the Autumn Budget but has gained urgency due to concerns that the planned pay-per-mile road pricing scheme will severely damage EV demand.
The pay-per-mile scheme, set to begin in 2028, will charge EV owners 3p per mile driven. Plug-in hybrids will pay a reduced 1.5p per mile (to account for fuel duty already paid on petrol). EVs will also continue paying the standard £195 annual VED rate introduced for them from April this year.
The Government is also considering cutting VAT at service stations, supermarkets, and residential streets by 15 percentage points.
The current system is said to actively discourage drivers without off-street parking (and thus no home charger) from switching to EVs, as they effectively pay four times more tax than those with driveways.
A government source emphasised that convincing people to switch requires showing EVs are both easy and cheap, with potential savings available. Tax cuts are being viewed as necessary to offset the impact of pay-per-mile.
It also confirmed it is reviewing public charging costs, including energy prices, other contributors, and options to reduce them for consumers.
Other news from United Kingdom
UK Mandatory E-Invoicing from 2029: Main Points from Consultation Response
Public
United Kingdom
Author: Ema Stamenković
United Kingdom
Author: Ema Stamenković
The UK will mandate e-invoicing by 2029 through a 4-corner model, deferring real-time reporting (RTR) until after e-invoicing is established. Despite broad support for RTR among respondents, it requires clear standards, governance, and phased implementation. HMRC underscores that e-invoicing alone cannot pre-fill VAT returns, but it may inform future products. Respondents highlighted benefits of R... Read more
UK: Navigating Cross-Border VAT Compliance for Gibraltar’s Digital Economy
Public
United Kingdom
Author: Ema Stamenković
United Kingdom
Author: Ema Stamenković
VAT is a crucial legal requirement that dictates service taxation and registration in foreign jurisdictions. Being in a no-VAT zone doesn't negate risks of non-compliance. Without proof of B2B transactions, suppliers may face retroactive B2C tax liabilities. The article highlights the need for robust B2B validation under the "Two-Item Rule." B2B transactions benefit from reverse charge mechanisms,... Read more
UK to Implement Nationwide E‑Invoicing by 2029
Public
United Kingdom
Author: Ema Stamenković
United Kingdom
Author: Ema Stamenković
UK confirms mandatory electronic invoicing for VAT starting April 2029, giving businesses time to prepare. The UK government has confirmed mandatory electronic invoicing for VAT purposes starting in April 2029. According to a December 10 statement from the Association of Taxation Technicians (ATT), the extended timeline gives businesses more time to prepare. Per the government's November 26 anno... Read more
Supporting UK and EU Firms with VAT Fiscal Representation
Public
United Kingdom
Author: Ema Stamenković
United Kingdom
Author: Ema Stamenković
Since Brexit, VAT rules have notably shifted, presenting compliance challenges for cross-border businesses. VAT fiscal representation enables non-established businesses to meet local VAT obligations via a local professional. The representative ensures compliance and is often jointly liable for VAT debts. While UK businesses may need one in some EU states, EU businesses typically register directly... Read more
UK Mandates B2B e-Invoicing from 2029
Public
United Kingdom
Author: Ema Stamenković
United Kingdom
Author: Ema Stamenković
The UK will mandate e-invoicing for all VAT invoices by 2029, enhancing efficiency and compliance with a phased rollout and detailed plans to be announced in Budget 2026. The UK Government has announced mandatory e-invoicing for all VAT invoices (B2B and B2G) starting in 2029, with a detailed roadmap to be published at Budget 2026. The move aims to modernise tax processes, boost efficiency, produc... Read more
New document was uploaded: Online Sales in the United Kingdom
United Kingdom
Author: Ema Stamenković
This document aims to explain how online sales are handled in the UK. In the UK, there are various requirements for online sales, which implies that there are specific requirements that must be fulfilled according to The Consumer Rights Act 2015, The Consumer Contracts Regulations and The Electronic Commerce (EC Directive) Regulations 2002. Read more
Subscribe to get access to the latest news, documents, webinars and educations.
Already subscriber? Login