Electric Vehicles: Charging Points

Treasury written question – answered on 13th July 2021.

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Photo of Barry Sheerman Barry Sheerman Labour/Co-operative, Huddersfield

To ask the Chancellor of the Exchequer, what assessment he has made of the potential merits of reducing the VAT rate for on-street electric car charging.

Photo of Jesse Norman Jesse Norman The Financial Secretary to the Treasury

Electricity supplied at electric vehicle charging points in public places is subject to the standard rate of VAT (20 per cent). In order to keep costs down for families, the supply of electricity for domestic use, including charging electric vehicles at home, attracts the reduced rate of VAT (5 per cent).

Expanding the relief would come at a very high cost. VAT makes a significant contribution towards the public finances, raising about £130 billion in 2019/20, and helps to fund public 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.

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