Question to the HM Treasury:

To ask the Chancellor of the Exchequer, for what reason VAT treatment differs for residential off-street electric vehicle charging and public charging.

VAT is a broad-based tax on consumption and the 20 per cent standard rate applies to most goods and services. This includes electricity supplied at electric vehicle charging points in public places

However, in order to keep costs down for families, all domestic fuel and power, including the supply of electricity for domestic use, attracts the reduced rate of VAT (5 per cent). The reduced rate therefore also applies to charging electric vehicles at home.

Expanding the existing relief 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 plans to review the VAT treatment on electric vehicle charging.