In a potentially game-changing ruling, the First Tier Tribunal (FTT) delivered a major new development for EV charging and VAT. As a result, it challenged HMRC’s long-standing position and opened the door to lower costs.
Overview
HMRC’s policy states that electricity supplied via public EV charging points is standard-rated for VAT.
However, Charge My Street Ltd v HMRC [2026] challenged this view. Consequently, the FTT ruled that some public EV charging qualifies for the reduced rate.
Background: A Direct Challenge to HMRC Policy
Charge My Street Ltd (CMS) installs and operates EV charging stations across the north of England. It applied VAT at the reduced rate of 5%.
CMS argued that its electricity supply qualified as domestic fuel under UK VAT law.
However, HMRC firmly disagreed. According to HMRC's policy, electricity supplied at public charging points is always standard-rated (20%), This view rests on the fact that the supply is not made to a home or residential building.
Consequently, CMS appealed to the FTT. This case became a key new development for EV charging and VAT.
The Legal Turning Point
At the heart of the dispute lies Schedule 7A VATA 1994, specifically those provisions which allow reduced VAT on domestic fuel and power.
CMS relied on Note 5(g), which states that electricity supplied: “to a person at any premises… not exceeding 1,000 kWh per month” can qualify for the reduced rate.
However, HMRC tried to limit this interpretation. It argued that “any premises” means residential property only.
In addition, HMRC claimed the 1,000 kWh threshold should be split across days..
Tribunal Findings: A Broader, More Flexible Interpretation
In a decisive and carefully reasoned judgment, the FTT rejected HMRC’s restrictive approach.
Why These New Developments for EV Charging and VAT Matter
These new developments for EV charging and VAT could reshape the EV market.
For EV Owners
For Logistics and Fleet Businesses
These new developments for EV charging and VAT matter greatly for fleet operators.
What Happens Next?
The FTT allowed the appeal in principle. However, the decision is not yet final. Because of greater adoption of EV's in the UK, the government is having to rethink it's tax policy.
HMRC may appeal. Therefore, uncertainty remains. In addition, current HMRC guidance still treats public charging as standard-rate
Final Thoughts
These new developments for EV charging and VAT reflect a wider shift in tax policy.
Currently, high public charging costs remain a barrier to EV adoption.
Therefore, this decision could reduce costs and support wider EV use.However, businesses should act carefully. They should not change VAT treatment until the position becomes clear.
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