A tax tribunal has ruled that the reduced 5% domestic VAT rate can apply to electricity supplied for charging electric vehicles (EVs) on the public network, rather than the standard 20% rate.
The case was brought by community charge point operator Charge My Street which challenged the higher rate following advice from Deloitte’s tax specialists.
Deloitte argued that existing VAT rules already treat the supply of less than 1,000kWh of electricity per month to a person at any particular premises as domestic and that this threshold could reasonably cover public EV charging.
Oliver Jarratt, director and VAT specialist for Deloitte Legal, said that even if a driver relied on the same public charge point, it would be “nigh-on impossible” to exceed 1,000kWh per month.
In a decision published this week, the First-tier Tribunal – which heard the case last October – agreed that the 5% rate applies to public EV charging in those circumstances, rejecting HMRC’s interpretation.
Daniel Heery, director at Charge My Street, welcomed the ruling, saying: “Our mission has always been to make neighbourhood charging accessible to everyone, and today’s ruling supports that mission. Lower VAT on charging improves fairness and helps accelerate the shift to cleaner transport for all.”
Writing on LinkedIn, Jarratt called the outcome decisive, stating: “The judgment is clear, unequivocal and a thumping victory for Charge My Street.”
He added that while HMRC could seek permission to appeal, he questioned whether it would be granted given, he says, “how strongly the Tribunal rejected HMRC’s arguments on what the terms ‘premises’ and ‘rate’ meant”.
HMRC has previously maintained that the reduced rate for small quantities of electricity only applies where there is an ongoing supply to a person’s house or building below 1,000kWh per month and so “does not apply to supplies of electric vehicle charging at charging points in public places”.
It argued this was because supplies are made in locations such as car parks, petrol stations and on-street parking rather than a person’s home and because they are not usually an ongoing supply to one person where the rate of supply can be calculated.
An HMRC spokesperson told AM sister title Fleet News it is “carefully considering the decision” and its “next steps”.
Last month, Treasury officials were reported to be exploring ways to reduce the cost of charging EVs in public, amid concerns within government that a planned pay-per-mile levy from 2028 could dent consumer demand.
EV adoption champions have long insisted that lower income households are being shut out of EV ownership, risking a two tier system.
According to Autotrader’s No Driver Left Behind 2026 report, households earning under £40,000 are significantly less likely to consider an electric car than higher income groups, with affordability the main barrier to adoption.