A decision to not introduce drastic car tax changes has been dubbed a “considerable step backwards” by leading finance experts.
Bradley Post, MD of RIFT, has called out the Government’s refusal to reduce VAT rates on public charging bays with some electric car owners slapped with higher fees.
He suggested that it was “not realistic” to encourage EV take-up and then charge certain drivers more to use the roads.
Under current rules, those topping up at public bays are charged 20 percent VAT compared to just five percent for those charging at home.
It means those without access to off-street parking are forced to pay hundreds of pounds more to use their cars.
Speaking exclusively to Express.co.uk, Bradley explained: “The Government’s refusal to slash VAT on EV public charging stations is a considerable step backwards in driving a consumer shift towards more environmentally friendly modes of transport.
“Yes, EVs still have their limitations, particularly with respect to long-distance travel, and as such many plug-in hybrid vehicle drivers may be far less reliant on charging points.
“However, it’s simply not realistic to expect those without the luxury of a private driveway to pay more to charge their vehicle and this is likely to slow the evolution of road travel over the coming years.”
The Government revealed there were no plans to adjust the rates as they responded to a House of Lords Environment and Climate Change Committee report calling for updates.
Politicians said they had “recommended” the Government “explore options” to equalise VAT rates.
However, officials “disagreed” with the statement as VAT was a “broad-based” tax and not only applied to electric cars.
They also suggested that updating the rules would lead to “pressure on public finances” in a major blow.
The report added: “Whilst this relief was not designed or introduced for charging EVs at home, this relief applies for all uses of domestic energy. Electricity supplied at EV charging points in public places is subject to the standard rate of VAT (20 percent).
