Andy Burnham Eliminates Domestic Electricity VAT Amid Charging Divide

Prime Minister Andy Burnham eliminated VAT on domestic electricity rates, reducing the tax from 5% to 0% to lower household energy bills. While the policy reduces costs for homeowners, motoring experts warn it exacerbates a driveway divide by leaving the VAT on public charging at 20%.

Industry leaders and critics argue the policy penalizes renters and flat-dwellers who lack private parking. Public charging can cost up to 50p per kWh, while home charging costs approximately 7p per kWh. Hippo Leasing and Electric Vehicles UK state that this structure forces those with the fewest options to pay the most for energy.

Experts suggest that reducing public charging VAT to the previous 5% domestic rate would have saved high-mileage electric vehicle drivers up to £389 annually. This disparity is particularly acute in England, where data from the English Housing Survey indicates that 32% of households lack off-street parking.