Price hikes are on the horizon for InstaVolt’s charging, following clarity on the VAT rate for public charging, while other networks remain unaffected.
HM Revenue and Customs (HMRC) has confirmed that the VAT on public electric vehicle (EV) charging stands at 20%, having received requests for clarity from businesses around reduced rates due to the level of electricity being supplied.
HMRC explained that de minimis – a mechanism that allows a 5% VAT rate for supplies of small quantities of electricity – does not apply to public EV charging, and that there is therefore no relief or exemption to the standard VAT rate of 20%.
While both Pod Point and Osprey told Current± that they remain unaffected - with the latter explaining that it has always charged 20% due to its interpretation of the VAT regulations - InstaVolt has announced its costs are now increasing 15%, with this to be passed onto its customers.
Prices will – as of 27 May – increase to £0.40/kWh, up from £0.35p/kWh, with this difference to be completely passed on to HMRC.
InstaVolt CEO Adrian Keen said that the company “strongly disagrees” with the 20% rate, stating it “discriminates between the millions of drivers who do not have access to off-road parking and rely solely on public charging”.
The charging network is therefore to continue to engage with the government to reduce the rate of VAT on public EV charging to 5% in line with domestic energy tariffs, with Keen adding that if the VAT rate is reduced, InstaVolt’s prices will immediately be reduced.
This follows controversial changes in 2019 to the VAT rate on energy saving materials such as domestic energy storage that saw the rate jump from 5% to 20%, with continued calls for this to be reversed being made since its implementation.