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<p>In order to keep costs down for families, the supply of electricity for domestic
use, including charging an electric vehicle (EV) at home, attracts the 5 per cent
reduced rate of VAT. However, electricity supplied at EV charging points in public
places is subject to the 20 per cent standard rate of VAT.</p><p> </p><p>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 charging at home.</p><p> </p><p>Harmonising
the rate of VAT on electricity for public and domestic charging points for electric
vehicles would require the Government to expand the existing VAT relief on electricity
for domestic use (that is also used to charge EVs at home) to electricity for use
at public EV charge points and this would come at a cost.</p><p> </p><p>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.</p><p> </p><p>Although
there are no current plans to change the VAT treatment of electricity supplied at
public EV charge points, the Government is committed to supporting the transition
to zero emission vehicles to help the UK meet its net-zero obligations. The Government
has committed £2.5 billion since 2020 to support the transition to zero emission vehicles,
which funds targeted vehicle grants and the rollout of charging infrastructure.</p>
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