Thank you for contacting me about VAT on electric vehicle charging.
In my role as Shadow Secretary of State for Transport, this is a policy matter I am immensely passionate about. Especially in light of the climate crisis which we are currently facing, which requires urgent Governmental action to support the transition to electric public and private transport.
As you note, the VAT on charging of electric vehicles at public charge points is 20%, whereas for charging electric vehicles at home, it is charged at the reduced rate of 5%.
In response to questions on this issue and calls to remove this disparity, the Government says it has no plans to review the VAT treatment of electric vehicle charging. It says the reduced VAT rate applies to charging at home because this is the rate that applies to all domestic fuel and power, which is what is used to charge electric vehicles at home. It says any loss in tax revenue from reducing VAT on public charging of electric vehicles would have to be balanced elsewhere in the public finances.
Nevertheless, I hope the Government gives proper consideration to the points highlighted by the FairCharge campaign. In particular, I appreciate the wider issue of ensuring that electric vehicle ownership is affordable and accessible for everyone and throughout the whole country. It is for this reason that I support calls for the Government to offer interest-free loans for new and used electric vehicles to those on low to middle incomes, and to trial a national scrappage scheme for people who want to trade in their old cars. It is also why I support accelerating the roll-out of on-street charging points, targeting areas of the country that have been left out so far.
Likewise I am really proud the Labour Party has a policy for a Green Economic Recovery, with £30 billion in planned capital investment brought forward as part of a rapid stimulus package to support up to 400,000 new, clean jobs in manufacturing and other key sectors. This will work to accelerate investment in clean projects such as energy efficiency, flood prevention, offshore wind, cycling and walking infrastructure and the electric vehicle charging network would help to create secure, stable employment in every corner of the country right now. We have an opportunity to be the leading light on tackling climate change, by introducing bold and forward thinking green policies.
I believe that through these measures we can ensure that everyone can benefit from the electric vehicle revolution. I can assure you that I will continue to monitor this issue and keep in mind the important points you raise.