Electric car drivers facing ‘pavement tax’ with higher yearly costs

GB News guests debate using electric cars

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New data has revealed that the tax discrepancy for electric vehicle drivers without private parking has risen to up to £227 per year. The additional “pavement tax” burden is the result of EV drivers paying four times the rate of VAT (20 percent) to charge publicly than charging at home (five percent). 

The “damning findings” reflect the growing cost of charging an EV on the public charging network.

This was highlighted with the announcement that the average cost of using a rapid or ultra-rapid charger rose from 44p/kWh in March to 56p/kWh in August, based on data from FairCharge and Zap-Map.

The average cost of charging at a fast or slow charger also rose, from 30p/kWh to 39p/kWh, respectively. 

This means that the average cost of EV charging for those with private parking is now £863 per year, compared to £1,418 for those without. 

FairCharge, the electric vehicle campaign led by former Top Gear presenter Quentin Willson, warn that the “pavement tax” on drivers without private parking has risen to £148 per year on average, up from £115 in March. 

Furthermore, they warn that the gap could be as high as £227, given that EV drivers without driveways do not have access to low-cost overnight tariffs, such as the 7.5p/kWh tariff offered by Octopus Go. 

Almost four in 10 households say they can’t charge an electric vehicle at home.

One of the key reasons for this was that they only have on-street parking or a parking space where they are unable to use a charger.

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Another common reason was that they rent their home and a charge point is not installed.

Quentin Wilson, the founder of FairCharge, said the growing discrepancy between the cost of charging at home versus on public networks was “incredibly concerning”.

It is estimated that 38 percent of households in the UK do not have a driveway.

He added: “This outdated VAT legislation is in need of immediate reform or else the Treasury risks hindering growth in EV adoption, investment in charging infrastructure and ultimately, the wider transition to cleaner air and energy security.

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“If the Chancellor isn’t concerned about the sheer unfairness of the policy, then surely he can at least see the economic case that it is undermining investment in the public charging network, which would otherwise be helping boost growth. 

“I urge the Government to take the relatively simple, low-cost, step and immediately axe the pavement tax.” 

He added that the UK’s transition to electric vehicles should not come at a cost to those without private parking.

Campaigners argue that the pavement tax is a “policy misstep” which could threaten the transition.

It is believed it would cost just £37.3million annually to overturn it and slash VAT levels.

In September, 23 public charge point operators supported this view, signing an open letter calling for an immediate equalisation of the VAT regime between public and private EV charging ahead of the Chancellor’s mini-Budget.

Melanie Shufflebotham, Co-founder & COO at Zap-Map, said: “With drivers up and down the country increasingly making the switch to electric, the ‘Pavement Tax’ issue is only becoming more pressing. 

“Charge point operators across the UK are investing huge amounts of time and effort into creating a robust charging network that works for everyone, while EV drivers are only trying to do the right thing and reduce their carbon emissions – those without access to a home charger should not be penalised for doing so. 

“While it’s great to see Zap-Map data put to good use in the FairCharge campaign, it’s imperative that the Government sees sense and acts now to reduce the rate of VAT on public charging.” 

RAC research shows that just 28 percent believe the cost of public charging is fair while three-quarters think the rate of VAT at public charge points should be reduced to five percent, bringing it in line with domestic charging. 

Simon Williams, the RAC’s EV spokesperson, echoed the calls for the Government to take action, saying it is “essential” for an “easy change” to be made.

Kwasi Kwarteng has brought forward his economic plan to October 31, when many will be watching to see if the Government change VAT rates for EV drivers.

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