VAT & Electric Charging

The Charge My Street case has become a landmark decision in the world of VAT and electric vehicle (EV) charging in the UK. At its heart, the case tackled a deceptively simple question: should the electricity supplied at public EV charge points be subject to the standard 20% VAT rate, or does it qualify for the reduced 5% rate, just like electricity supplied for domestic use?

Charge My Street Ltd, a community benefit society, operates public EV charging points. They argued that their supplies of electricity should benefit from the reduced VAT rate under VAT provisions that say if a person receives less than 1,000 kWh of electricity per month at any premises from the same supplier, it counts as “domestic use” and qualifies for the reduced rate.

HMRC, however, took a stricter view. They maintained that public charge points didn’t count as “premises” for these purposes, and that the reduced rate was only for supplies to people at their own homes or under ongoing contracts. In their view, public charging was always standard rated.

The First-tier Tribunal disagreed with HMRC. It found that “premises” could include public places like car parks, not just private homes or businesses. The Tribunal also clarified that there was no need for the recipient to own or control the premises, nor was an ongoing contract required. What mattered was that the supply was made to a person at an identifiable location, and that the total electricity supplied to that person at that premises by the same supplier did not exceed 1,000 kWh per month.

Importantly, the Tribunal highlighted the principle of fiscal neutrality. It pointed out that HMRC’s approach would unfairly penalise people who rely on public charging - often those without off-street parking - compared to those who can charge at home.

In summary, the Charge My Street decision means that, provided the 1,000 kWh monthly limit is not exceeded, electricity supplied at public EV charge points can qualify for the reduced 5% VAT rate. This is a significant win for EV users and operators, ensuring fairer tax treatment and supporting the transition to greener transport.