Spring Budget 2023: Reduce VAT on public charging to drive EV transition

Chancellor must be bold with green initiatives.

Reducing VAT on public charging for electric vehicles (EV) from 20% to 5% so it aligns with the rate for domestic charging is a must for the Chancellor.

Drivers with off-street parking currently only pay 5% VAT. This pointless disparity discriminates against drivers without driveways or garages and risks undermining the UK’s net zero strategy and dampening the recent growth of EV sales.

It’s also imperative the government intervenes to simplify the planning process for charging stations and improves the UK’s EV grid capacity. Working with local authorities to speed up the process of installing charge points installation should be a government priority, in addition to collaborating with distribution network operators to subsidise the cost of grid upgrades at project sites. Some market projects currently take up to 2 years to develop, causing the UK’s EV infrastructure to lag behind consumer demand.

The government should use the spring budget to go further and faster on its sustainability commitments. Low carbon companies already contribute £70bn and 840,000 jobs to the economy¹, however with greater investment and sector support, they could underpin the government’s levelling up strategy, drive economic growth and help meet the UK’s net zero greenhouse gas emissions by 2050. The Chancellor should grasp the nettle and provide greater incentives for businesses to become green and install renewable energy solutions, particularly high emitting sectors such as commercial real estate. Doing so would improve energy efficiency, support the overall net zero strategy and alleviate the pressure businesses are facing with energy prices 4 times higher than 12 months ago.

^{1 https://www.cbi.org.uk/articles/insight-for-business-on-the-uk-s-net-zero-transition/}

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