VAT Tribunal decision on Charge My Street

What it means for the EV charging sector

Jon Archibald, Director, VAT, Customs and International Trade

The First-Tier Tribunal has recently released its decision in the Charge My Street case, a ruling that could have meaningful implications for the electric vehicle (EV) charging industry and for consumers who use public charging points.

The case centred on the disparity between the VAT treatment of ‘domestic’ supplies of electricity and electricity supplied via public EV charging points.

Domestic supplies of electricity, less than 1,000 kilowatt-hours per customer per month, are subject to 5% VAT; however, since the introduction of EV cars (and indeed, public EV charging points), HMRC has maintained that the reduced rate does not extend to public EV charging points.

HMRC’s position is that the provisions only apply when electricity is supplied to a person’s home or other premises. Charge My Street challenged this position, arguing that the nature of EV charging aligns more closely with domestic supply, even when delivered away from the home.

Tribunal’s findings

The Tribunal ruled in favour of Charge My Street, determining that under existing UK law, the reduced rate should extend to public charging facilities. This was because, despite the legislation referring to supplies to domestic properties, it also referred to the threshold of 1,000 kilowatts, and this should take precedence if the electricity was supplied from a single place.

Wider implications

Although the decision has been heralded as a landmark ruling in the sector for both public EV charging providers and consumers alike, it does not set legal precedent. It remains to be seen whether HMRC will accept the decision or appeal it further.

Should HMRC accept the decision or Charge My Street win again at a higher level of court, EV charging providers can probably expect significant refunds going back up to four years.

Consumers should also see a saving on cost as the lower rate of VAT begins to be applied.

If you would like to discuss this further, please get in touch with your usual Crowe contact.