The use of electric vehicle charging points is becoming more common in public places and I am aware that HMRC has received requests from businesses and business representatives to clarify the rules in specific cases, and in particular to confirm the VAT status of electric vehicle charging at charging points in public places.
There is a reduced rate of VAT for supplies of small quantities of electricity, known as ‘de minimis’. The de minimis provision does not apply to supplies of electric vehicle charging at charging points in public places. This is because these supplies are made at various places such as car parks, petrol stations and on-street parking, not to a person’s house or building.
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.
Any decision to modify our tax regime is a matter for the Treasury and careful consideration will be given to any proposed amendments to current VAT rates. I understand that the Government keeps all taxes under review, including VAT. I shall be following the developments on this issue closely.
Unfortunately, I was unable to attend FairCharge’s recent event due to prior Parliamentary commitments. However, please be assured that I do recognise the importance of this issue and recently spoke in a Westminster Hall debate on electric vehicle infrastructure cost availability.