By GB News (World News) | Created at 2025-03-24 09:31:11 | Updated at 2025-04-06 01:53:53
1 week ago
The AA is urging Chancellor Rachel Reeves to cut the rate of VAT on public electric vehicle charging in the upcoming Spring Statement ahead of major car tax changes.
This reduction could save electric vehicle drivers nearly £5 per charge at ultra-rapid chargers, according to the AA's latest EV Recharge Report.
The motoring organisation believes the tax cut from 20 per cent to five per cent would help boost EV uptake at a time when drivers are facing new costs.
The call comes as EV owners prepare to pay car tax for the first time from April 1, 2025, as announced by former Conservative Chancellor Jeremy Hunt.
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Experts are urging the Chancellor to cut VAT on EV chargers as new tax measures are rolled out
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The AA's report shows that while charging prices were frozen in February, petrol prices continued to rise, approaching 140 pence per litre, making off-peak ultra-rapid charging two pence per mile cheaper than petrol.
The proposed VAT cut would particularly benefit households without dedicated off-street parking, helping them avoid what the AA calls the "pavement tax".
The motoring organisation notes that prospective EV owners have indicated that incentives would help them purchase and maintain electric vehicles.
From April 1, 2025, electric vehicles will be subject to Vehicle Excise Duty (VED) for the first time in history.
This change will apply retrospectively to EVs registered before this date, with owners required to pay the standard rate tax of £195 annually.
Some savvy EV owners have been taxing their vehicles early at the existing £0 rate to defer payment until March 2026.
The new tax structure also includes an additional expense for higher-priced electric vehicles. Any EV registered on or after 1 April 2025 with a list price exceeding £40,000 will face an expensive car supplement.
This additional charge amounts to £410 annually for five years after the vehicle's first 12 months on the road. The £40,000 threshold includes the price of the vehicle plus any optional extras added at purchase.
There are more than 75,000 public EV chargers around the UK
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The AA believes that while all vehicles should contribute to road tax, electric vehicles should be granted a discounted rate to encourage more drivers to consider electric options when purchasing their next vehicle.
Cousens added: "While all should pay vehicle tax, a discounted rate for EVs would make buyers take notice before spending their hard-earned cash."
