Electric vehicles are becoming more mainstream with each passing day, which is great news for the environment and our wallets. With governments around the world incentivizing EV cars, now is the perfect time to make the switch to an Electric Vehicle. However, there are still a few roadblocks to navigate, particularly when it comes to charging. One of the most commonly asked questions is about the difference in VAT % between at home and public charging. In this blog post, we'll answer that question and help you understand the cost differences between charging at home and public charging.
Charging at Home:
Charging an electric vehicle at home is the most convenient and cost-effective option. In the UK, electricity is taxed at a reduced VAT rate of 5%, which means you will only have to pay 5% VAT on the electricity you use to charge your EV at home. This rate of VAT is significantly lower than the standard rate of 20% that is applied to most goods and services in the UK.
Public Charging:
Public charging can vary in terms of VAT %. If you charge at a public charger with a paid tariff, you are likely to incur VAT at the standard rate of 20%. The VAT is calculated based on the cost of the electricity plus any service fees that may be charged by the network operator. Some providers have multiple tariff options that may use a reduced VAT rate, but the standard rate of 20% is most common.
However, if you're a registered business or driving an electric vehicle as part of a company fleet, you can reclaim the VAT paid on public charging. This means that public charging would not necessarily cost you more than charging at home.
Other Factors to Consider:
While VAT % is an essential factor to consider, there are other things that you need to keep in mind when choosing between at home and public charging. For example, how close the public charger is to your home or workplace, the speed of the charger, and the cost of the charging tariff. If you park your EV on a driveway or in a garage close to your house, charging at home is likely to be more convenient than public charging.
However, whether public charging or at home charging is cheaper, it depends on individual circumstances- your location, whether you're a business or individual EV owner, and how far you need to travel to find a charging point. Ultimately, making the switch to an electric vehicle is a smart financial move, and whichever charging option you choose, you'll still save a lot on fuel costs!
Another way to save money on your EV is before April 2025, VED (Road Tax) is £0 per year. This is a huge saving on the expected increase to the standard £165 after the first year.
How does VAT Vary?
There are currently three different rates of VAT used in the UK, the way that the VAT rate is decided is dependant on the goods and services, and how they are used. Most commonly, goods and services are charged at the standard rate which is 20%, everything should be changed at this rate unless the goods or services are classed as reduced or zero-rated.
VAT Rates
Rate | % | What the rate applies to |
Standard rate | 20% | Most goods and services |
Reduced rate | 5% | Some goods and services, eg children’s car seats and home energy |
Zero rate | 0% | Zero-rated goods and services, eg most food and children’s clothes |
Other examples of zero-rated items include:
- Books and newspapers
- Children’s clothes and shoes
- Motorcycle helmets
- Most goods you export from England, Wales and Scotland (Great Britain) to a country outside the UK.
Exceptions to the VAT rule
VAT can also vary dependent on where a food item is consumed, for example food bought in shops in VAT free, but pubs and restaurants much charge VAT on everything eaten either on the premises. However, VAT does not need to be charged on cold takeaway food, unless it is consumed in a designated customer area.
Furthermore, as children’s shoes are exempt from TAX, adults who can fit into children’s shoes also won’t pay TAX! The styles are normally almost identical and mean that the customer can make huge savings.