VAT on road side charging - possibly dropping to 5% from 20%

[uknick]

Recent ruling in the tax First Tier Tribunal allows for VAT to be charged at 5%, the domestic rate, and not 20%.

https://www.accountingweb.co.uk/tax/hmrc-policy/va...

No doubt HMRC will want to appeal the ruling.

[ashenfie]

Seam a very odd debate. I do wonder if a road side charger is considered domestic Thu. Domestic normally relates to the home. Interesting thu.

[Emptygarage]

ashenfie said:

Seam a very odd debate. I do wonder if a road side charger is considered domestic Thu. Domestic normally relates to the home. Interesting thu.

Driver A has a drive and can charge at home.

Driver B has no off street parking and has to rely on public charger.

Their requirements are the same, should one pay more VAT for not having a drive?

Around 50% of UK homes don't have off-street parking.

In this sense I hope the term domestic applies to the vehicle and it's use rather than the location, it seems like the change will happen.

[samoht]

ashenfie said:

Seam a very odd debate. I do wonder if a road side charger is considered domestic Thu. Domestic normally relates to the home. Interesting thu.

It's confusing, but low-volume business users can qualify to pay 5% VAT on electricity as long as their usage is under 1000 kWh per month, i.e. such low usage is legally 'deemed' to count as domestic.

legislation.gov.uk said:

For the purposes of this Group the following supplies are always for domestic use -
a supply of electricity to a person at any premises where the electricity... was not provided at a rate exceeding 1000 kilowatt hours a month.

https://www.legislation.gov.uk/ukpga/1994/23/sched...

The charging company in this case have argued that since they are supplying each person with less than 1000 kWh a month, then public EV charging is a sequence of 'domestic' (low volume) supplies and thus qualifies for the lower 5% rate. And the First Tier Tribunal have agreed with them.


Moving from law to PR and politics, if I were a major EV charging company I would
1) Immediately remove 15% VAT from their public charging prices
2) Cut their VAT payments to HMRC to 5% quoting the above case
3) Launch a loud advertising campaign promoting their new cheaper rates, proclaiming "Great News, the government tribunal have reclassified public charging under the 5% rate" and talking about how this now allows you to support government policies of ever-increasing EV sales, ameliorate the cost of living problem, and promote energy independence from the Middle East.
4) Lobby the government accordingly

I.e. to make hay while the sun shines by attracting customers with a price cut, and to make it as politically embarrassing as possible for HMRC / the government to overturn this.

[oop north]

Dan Neidle (tax whiz) reckons this is a waste of time as the charging companies will nick all the VAT reduction.

If not, then with energy prices high at the moment, there is a chance that it will be used to absorb some of the increase in wholesale prices.