The new UK Prime Minister has removed VAT from domestic electricity bills starting from autumn 2026. The rate of VAT applied to household electricity will be cut from 5% to 0% from October 1. This means electric car drivers will pay even less for charging at home, while those without off-road parking and the ability to charge an electric car at home will be even more disadvantaged.
On his second day as Prime Minister, Andy Burnham announced, “We’re taking immediate action to cut taxes on energy bills, put more money in people’s pockets and bring back hope.”
EV drivers currently pay 20% VAT on public charging and a 5% rate to charge their electric vehicles at home unless they have vehicles with removable batteries, such as most electric bicycles, but this is seldom the case for electric cars. The two-tier system for electric cars was already criticised for its unfairness even before VAT on household electricity dropped to zero. Now that gap has further widened.
Chief executive officer of EVA England, Vicky Edmonds, said she welcomed the cutting of VAT on household energy bills. “For EV drivers who charge at home, it will make cars that can already save them thousands of pounds even cheaper to run. But millions of drivers without a driveway will not fully benefit because they can’t easily access home charging.”
