Tax cuts on EV charging could save you big money

Chancellor Rachel Reeves plans to cut the cost of public EV charging following backlash over the government’s pay-per-mile road tax on electric cars and plug-in hybrids in her 2025 Autumn Budget, according to The Telegraph.

Treasury officials are considering cutting VAT on public EV charging from 20% to just 5%. This would match the lower rate already paid by drivers with home chargers, effectively ending the so-called EV ‘pavement tax’.

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The car industry has been pushing for this change for years. It was hinted at in the 2025 Autumn Budget, but is now reportedly being fast-tracked after concerns grew over the Chancellor’s controversial pay-per-mile (eVED) plan.

Although this new eVED won’t take effect until 1 April 2028, data from the Society of Motor Manufacturers and Traders (SMMT) in November 2025 already showed a slowdown in EV sales after the announcement.

The Office for Budget Responsibility (OBR) also predicts the policy could put off drivers from switching, cutting EV sales by around 440,000 between November 2025 and March 2031. But the Treasury has disputed OBR’s figures, saying it will be closer to a 120,000 EV shortfall between now and the end of the decade.

The Treasury said that on top of its Electric Car Grant: “We’re also reviewing the cost of public EV charging which will look at the impact of energy prices, wider cost contributors, and options for lowering these costs for consumers.”

Industry experts are in talks with the government about ways to keep EV sales growing. One insider told The Telegraph that the Treasury is worried eVED could “kill EV demand.” They added: “The way we convince people to switch to EVs is by showing it’s easy and cheap. There are real savings here for many drivers.”

Around 35% of Brits don’t have access to a driveway or off-street parking, according to the RAC. Also, not everyone who does can install a home charger – for example, people with shared parking at flats. That leaves a significant number of drivers who currently can’t enjoy the cheaper rates of home charging.

Public chargers are therefore seen as key if the UK wants to hit its target of 80% of new cars being electric by 2030.

Charging an electric car to 80% with a 7kW home charger costs about £5.88, but nearly £11.30 at a slow public charger – almost twice as much, according to the AA’s Recharge Report.”

The gap between home and public charging is even bigger when you look at averages. Kerbo Charge, a pavement charging company, found that off-peak home charging at 10p per kWh is 450% cheaper than public chargers, which average 55p per kWh for slow or fast charging.

If you use a rapid charger, that difference can skyrocket to 690%, showing just how much more expensive public charging can be for EV drivers without home access.

Cutting VAT on public charging would mean huge savings for those without a home charger. Right now, drivers charging at home pay about 8p per kWh, while public chargers cost around 54p per kWh, according to Zapmap.

Other options exist – such as pavement charging points – but many need a guaranteed parking spot outside your home, which isn’t realistic for most people.

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