John Healey used the Autumn Budget to announce a stealth tax shift on EV charging, with £100 million earmarked over two years from April 2027 to reduce prices at low-power public chargers near people’s homes. The change is aimed at drivers who cannot charge on a private driveway and rely on public charging near home.
The government expects the scheme to save an EV driver who uses on-street charging around £150 a year on average. The Department for Transport has yet to set out exactly how the scheme will work, but the measure is not a fund for installing new chargepoints.
John Healey’s budget plan
Healey’s announcement gives the policy a start date and a spending envelope: £100 million over two years, beginning from April 2027. The support is directed at low-power public chargers near homes, which is where many drivers without off-street parking must charge.
The government will also implement a previous recommendation to introduce a tariff forwarding scheme. Under that arrangement, drivers would be able to charge at certain public chargers using the same kWh rate that their home energy tariff uses, rather than a separate public charging price.
The VAT split on charging
The budget did not cut VAT on public charging, and VAT remains at 20% on that chargepoint use. By contrast, the 0% VAT rate on domestic electricity, which is normally 5%, has been extended until July 2027 after being introduced on 1 October.
Earlier this year, the government appealed against a tax tribunal ruling that found public charging should qualify for the lower 5% rate. That leaves one part of the charging bill eased for home electricity while public charging stays on the higher rate.
Vehicle Excise Duty from April 2028
Healey’s budget also kept the planned electric Vehicle Excise Duty on track for April 2028. Under the plan announced last year, BEVs would be charged 3p per mile and PHEVs 1.5p per mile.
The government says the duty is intended to recoup fuel duty that is forecast to fall as more drivers switch to electric. For drivers who cannot install home charging, the practical question is how much of the £100 million scheme reaches the chargers they actually use, and how much of the public price still reflects VAT and tariff design.
