⚡ The short version
From 1 October 2026, VAT on domestic electricity in England, Scotland and Wales has been cut from 5% to 0% until 31 March 2027 — and because a home charger runs off your household supply, every home charge is now cheaper automatically. Public charging still carries the full 20% VAT, so the “driveway divide” has widened: industry body ChargeUK says drivers who rely on public chargers now pay more than £1,000 a year more than home-charging drivers, with VAT alone accounting for £200 of that gap.
Today, 1 October 2026, is one of the quietest big days in UK EV policy this year. The temporary zero rate of VAT on domestic electricity in Great Britain came into force at midnight, cutting the tax on household electricity from 5% to 0% for the six months to 31 March 2027. It was announced by Prime Minister Andy Burnham on 21 July and confirmed by HM Revenue & Customs in a tax information note published on 8 September.
The measure was designed as a cost-of-living intervention rather than an EV policy — it applies to every qualifying household supply, not just car charging. But because an electric car plugged into a home charger is drawing exactly the same domestic electricity as the oven or the heat pump, every home charge is now zero-rated too. That makes it one of the most directly relevant tax changes for UK EV drivers this year.
What actually changed on 1 October
The zero rate applies in England, Scotland and Wales. It does not apply in Northern Ireland, where domestic electricity VAT stays at 5% under the Windsor Framework. There is nothing to claim: suppliers apply the cut automatically to bills, including customers on fixed tariffs, so nobody needs to switch deals or file paperwork to benefit.
The VAT cut landed on the same day the Ofgem price cap rose by 4% to £1,723 a year for an average household, so the headline bill change for most homes is modest — the Government estimates savings of up to £45 a year off the cap figure for an average household. For EV owners the arithmetic is different. Removing 5% VAT from a tax-inclusive price is a reduction of about 4.76% on the displayed rate: a tariff showing 8.00p/kWh for overnight charging drops to roughly 7.62p/kWh, while a daytime rate of 31.32p/kWh falls to about 29.83p/kWh.
What the VAT cut saves a home-charging driver
How much you save depends entirely on your tariff. The Government estimates the change could save EV owners between 40p and £1.15 per charge — equivalent to between £8 and £25 a year for a driver on average mileage. On a typical 10,000-mile year using an off-peak EV tariff, the practical effect is roughly a £10–£13 reduction in charging bills.
That is not a life-changing number, but it compounds in the right direction. Home charging on an off-peak tariff is already by far the cheapest way to run an electric car — typically 1.9p–3p per mile against petrol at 161.5p a litre in the third quarter. As we covered in our report on the AA’s UK EV Readiness Index hitting a record 60, electricity is now about 66% cheaper per mile than petrol for drivers who can charge at home. The VAT cut simply improves that already-favourable comparison, and it applies to every kWh you draw between now and the end of March.
The public charging divide just got wider
The uncomfortable flip side is that drivers without a driveway — who rely on public chargers — get none of this benefit. Public EV charging continues to attract VAT at the full 20%, after HMRC appealed against a First-tier Tribunal ruling that public charging should qualify for the same reduced ‘de minimis’ rate as domestic electricity. The appeal means the 20% rate remains in force while the case is pending.
Industry body ChargeUK calculates that the typical driver who relies mostly or wholly on public charging pays more than £1,000 a year more than a driver who charges mostly at home — and that VAT now contributes £200 of that difference, up from £150 before the cut. ChargeUK has coordinated a letter to the Prime Minister calling for the divide to be closed, signed by EVA England, EVA Cymru, the AA, Auto Trader and the FairCharge campaign. It argues that lowering VAT on public charging to the same rate as home electricity would cost around £180m a year on 2025 charging volumes — far less than the £1.1bn the Treasury is forecast to raise in 2028/29 from the new electric vehicle excise duty.
The divide is not marginal. ChargeUK and Gridserve both estimate that around 10 million British households have no off-street parking and therefore cannot charge at home. EVA England’s chief executive, Vicky Edmonds, said the Government must take “urgent action”, warning that over three-quarters of EV drivers now name the high cost of public charging as the greatest barrier to ownership.
Operators respond: free credit and one-day price cuts
Charging operators used the date to make the disparity visible. Fastned turned its network of 41 ultra-rapid hubs into a “nationwide driveway”, offering drivers a £25 charging credit — roughly the average cost of one of its charging sessions — via the code VAT2026 in the Fastned app between 1 and 2 October, with three days to use it. UK country director Tom Hurst called the VAT change “even more striking” for those without a driveway, and said an electric car should be an option for everyone, “regardless of whether you have a driveway”.
Gridserve cut prices across its network by 20% for one day on 1 October, dropping ultra-rapid charging from its usual 85p–92p per kWh to 68p–73.6p per kWh — a saving of £6.80–£7.36 on a typical 40kWh top-up. Fastned also released research showing 68% of the public thinks the VAT disparity is unfair, and that 57% of drivers who do not yet own an EV say cutting VAT on public charging to 0% would make them more likely to consider one.
What it means for you this winter
For home chargers, the message is simple: nothing to do, lower bills until March. For public-charging drivers, it is worth revisiting your options — a cheap overnight home tariff remains the single biggest saving available, and if you have any access to workplace or destination charging, it is worth using it. Our guide to charging an EV without a driveway sets out the practical alternatives.
Before you buy, or if you want to see exactly how the tax change affects your own mileage, run the numbers yourself: the charging cost calculator compares home, public and rapid charging against your annual mileage, the VED calculator shows road tax from the second year, and the car comparison tool lets you put rival models side by side. Check what is actually near you on the charging points map, browse the electric car library, and read our breakdown of home versus public charging costs in 2026 for the full tariff-by-tariff comparison. And for the trade picture behind car prices, our report on the EU–China hybrid car talks explains what next week’s Beijing meeting could mean for UK supply.
Sources
GOV.UK / HMRC — Temporary zero rate of VAT in Great Britain for domestic electricity, published 8 September 2026 (https://www.gov.uk/government/publications/temporary-zero-rate-of-vat-for-domestic-electricity-in-great-britain/temporary-zero-rate-of-vat-in-great-britain-for-domestic-electricity) · EV Powered — EV drivers set to be affected by VAT changes from today, 1 October 2026 (https://evpowered.co.uk/news/ev-drivers-set-to-be-affected-by-vat-changes-from-today/) · Fleet World — EV ‘driveway divide’ increases to £200 as home electricity VAT drops to zero, 1 October 2026 (https://fleetworld.co.uk/ev-driveway-divide-increases-to-200-as-home-electricity-vat-drops-to-zero/) · Transport + Energy — Fastned partners with Electrifying.com on VAT, 1 October 2026 (https://transportandenergy.com/2026/10/01/fastned-partners-with-electrifying-com-on-vat/) · The Independent — How to save 20% on Gridserve public charging on 1 October, 30 September 2026 (https://www.the-independent.com/cars/electric-vehicles/save-20-per-cent-on-gridserve-public-charging-b3059062.html) · Tech Torque Media — Home EV Charging Gets Cheaper From 1 October, 29 September 2026 (https://techtorquemedia.com/home-ev-charging-vat-cut-october-2026/).
