InstaVolt CEO issues statement in response to HMRC VAT Brief – 25 May 2021

Today HMRC has released a VAT Brief stating that the standard rate of VAT (20%) will apply to charging electric vehicles (EVs) at public charging points. The Brief also confirms that the ‘de minimis’ provisions – which allow for a reduced rate of VAT of 5% to be charged – does now not apply to public charging. This is extremely disappointing and immediately increases the cost to InstaVolt by 15% which we have to reluctantly pass onto our customers.

Since installing our first rapid charger in 2017 we have revolutionised the public charging experience for drivers. We were the first major network to introduce straightforward pence per kilowatt-hour (kWh) pricing and contactless payment, and put reliability and customer experience at the forefront of our offer. Since 2017 we have stayed true to those principals, and maintained our price of £0.35p/kWh despite the wholesale energy price alone increasing by over 20% over the past four years.

With the announcement today, we have no option but to  apply the additional VAT to our base price. Therefore, effective from 10pm on Thursday, 27th May, our price will regrettably increase to £0.40p per kWh. To be clear, InstaVolt will not profit from or retain any of the price increase. The rise is entirely attributable to VAT which will all be passed to HMRC.

Following OFGEM’s announcement of another £300m funding and the Government continuing to champion the transition to an electrified transport network, increasing the cost of charging to EV drivers through VAT just feels wrong. InstaVolt strongly disagrees with HMRC’s disappointing position on this subject. This single move discriminates between the millions of drivers who do not have access to off-road parking and rely solely on public charging, and those who benefit from home charging and the 5% rate that applies to domestic energy bills.

I’d like to reiterate that running an EV is still much cheaper than a petrol or diesel vehicle, with the cost-per-mile of electricity being over 25% cheaper than running a fossil fuel vehicle. InstaVolt, along with others in the industry, has spent millions of pounds over the last five years developing a world-class public charging network to build confidence in the ease of use, reliability and simple access. We hope HMRC recognises this mistake quickly, as taxing EV drivers with no ability to charge at home is not fair.

We will continue to engage with Government to reduce the rate of VAT on public EV charging to 5% in line with domestic energy tariffs, and be assured that if HMRC reverses its position we will immediately reduce our price, as InstaVolt does not want to profiteer from this tax increase and will continue to champion the interests of the consumer. If you want to lend your voice to this effort and support InstaVolt in this, you can write to your local MP and highlight the inequality this VAT position creates. This can only help reverse this disappointing change in the VAT position.

Yours sincerely

Adrian Keen

CEO, InstaVolt

 

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