SMMT Calls For VAT Change To Support Electric Vehicles

The Society of Motor Manufacturers and Traders (SMMT) has called on the government to cut the VAT rate levied on public charger use to encourage further take-up of electric vehicles.

Reflecting on its June figures for new car registrations, the SMMT observed that while overall registrations were up 25.8 per cent on June 2022, the 11th successive month of growth, the increase for battery electric vehicles (BEVs) was 39.4 per cent, with 31,700 drivers taking up the electric option.

This disproportionate growth is clear evidence that electric is becoming increasingly popular, but the SMMT said more could be done to encourage drivers to switch from electric to diesel, by reducing the VAT rate on public charging from the current 20 per cent to the five per cent charged to those who have a facility to do so at home.

It argued this would greatly increase take-up by making electric vehicle use, which is already 60-70 per cent cheaper per mile than petrol or diesel, even more accessible and would remove the cost penalty faced by those who don’t own their own homes or live in a property where such an installation is possible.

SMMT chief executive Mike Hawes said it was wrong that “those that do not have a driveway or designated parking space must pay four times as much in tax for the same amount of energy” and argued that ending this inequality would make EV ownership “fairer and attractive to even more people”.

Should this suggestion be taken up, it could make it an even better idea for electricians to go on an electric vehicle charging course, so they can fit the extra chargers that would be needed to meet the increased demand from drivers who can take advantage of a change in VAT.

Obvious examples of the sort of people who would benefit would include people living in apartment blocks, or in terraced homes with street parking, where narrow pavements would make any chargers outside homes an obstacle to pedestrians.

The need for more chargers is not just based on the challenges faced by those who don’t live in an owner-occupied semi with a driveway and garage. There is also the fact that many parts of the country lag behind in the provision of public chargers.

According to Department of Transport figures, there were just over 37,000 public charge points in the UK at the start of 2023, equating to 55 per 100,000 people. But this figure ranged from 131 per 100,000 in London to just 19 in Northern Ireland.

The north-west was the worst-served region in England at 31 per 100,000, but the situation is improving in some areas.

For example, Trafford Council in Greater Manchester is working with charge point installation firm Be.EV, which has already seen 41 new chargers installed in the borough.

The next phase will see a cluster of 16 ultra-fast chargers being fitted at Sale Water Park. These will have the capacity to charge up more than 380 cars on any given day while their owners enjoy the leisure facilities of the site.