Rishi Sunak blasted for ‘ignoring’ demands to cut EV ‘pavement tax’ rates 

Rishi Sunak has been criticised for ignoring industry calls to scrap a tax impacting electric car owners living in large cities.

EV owners are forced to pay 20 percent VAT on electricity when topping-up using on-street bays.

Meanwhile, those who charge their vehicles at home only pay five percent VAT meaning they make savings every time they plug in.

Driveway charging is more common in rural areas where homeowners have more land meaning there is a major divide between those living in the city and the countryside.

Alfonso Martinez, UK Managing Director of ALD Automotive | LeasePlan has demanded immediate changes to the rule after it was not addressed in the Autumn Statement.

He said: “With mandatory zero-emission vehicle sales targets arriving next year, and our recent World EV Day research showing running costs are a top priority for drivers, this needs to change.

“The Government has ignored industry lobbying to reduce the 20 percent VAT rate on public charging to match the five percent paid for domestic energy.

“This would undoubtedly help to stimulate retail demand for EVs, especially in the used market where supply is growing quickly but drivers have few incentives to switch.”

Last year, analysis from FairCharge revealed those charging on the road would pay an extra £227 per annum.

FairCharge added a reduction in EV charging rates would have “sent a clear signal” that the Government backed electric vehicles.

Earlier this week, the AA revealed the cost of kerbside charging had dramatically risen.

Costs were up around 13p/kWh during peak times with the average prices now standing at 67p/wWh.

It means the cost to charge a Vauxhall e-Corsa up to 80 per cent via a kerbside unit comes in at £26.80.

In comparison, the same vehicle will cost just 27p/kWh and around £10.80 if charged at home.

Jack Cousens, head of roads policy for the AA said: “EV drivers without a driveway will feel unfairly targeted with the hikes to kerbside charging.

“While chargepoint operators have a strong case regarding their responsibility towards grid management, those used to charging near their home could feel the pinch if they are unable to plug in during off-peak hours.

“Not reducing VAT on public EV charging to five percent in yesterday’s Autumn Statement, was a missed opportunity to eliminate the ‘pavement tax’.”

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