VAT on Electric Cars & VAT on EV Charging in the UK

Quick answers:

  • Buying or leasing an electric car: Subject to 20% VAT, the same as petrol and diesel vehicles.
  • Home EV charging VAT: VAT on home charging has been reduced to 0% from 5% since 1st October 2026 with the temporary EV charging domestic VAT exemption.
  • Public EV charging VAT: 20% VAT across the board.
  • Workplace EV charging: Typically 20% VAT, but check with your employer, as the business, if VAT registered, may be able to claim back VAT and therefore could offer a discounted rate to you.

Please note: this is general guidance only, not tax advice.

Is there VAT on electric cars?

Yes, just like petrol and diesel vehicles, new and used electric cars are subject to the standard UK VAT rate of 20%, following HMRC VAT Notice 700/64.

The advertised EV price already absorbs the 20% VAT, so there’s no need to worry about adding this when choosing to purchase or lease an electric car.

1. VAT on purchased electric cars

Is VAT charged on purchased electric cars?

Yes, any electric car sale, whether new or used, is subject to the standard 20% VAT.

Can you claim VAT on electric cars?

Where you purchased your EV

VAT

Can the VAT be reclaimed?
Private new EV purchase from a dealer 20% No
Private buyer, used electric car from dealer 20% No
Private buyer, used EV from a private seller No N/A
VAT-registered business purchase with exclusive business use 20% 100% can be reclaimed
VAT-registered business purchase with private use too 20% no

Example:

A Tesla Model 3 costs £37,990 – 20% VAT is included in the price (£7,598).

  • Private buyer: no reclaim
  • Business with private use: no reclaim
  • Business purchase with exclusive business use: Reclaim £7,598

2. VAT on electric car leasing

Is VAT charged on leased electric cars?

Yes, the usual 20% VAT is charged on leased electric cars, just like leased hybrid, petrol and diesel vehicles.

Can you reclaim VAT on leased electric cars?

It’s good news: 9 times out of 10, you can reclaim 50% or 100% of VAT on leased electric cars unless it’s on a personal contract hire lease.

Here’s a breakdown:

Type of leased electric car

Who it applies to

Amount you can reclaim
Personal contract hire Private leasers 0%
Business contract hire (with private use allowed) VAT-registered businesses (company cars and director cars) 50%
Pool car or 100% business usage (no personal use) VAT-registered business Up to 100%
Taxi, driving instruction or self-drive hire Qualifying businesses 100%
Hire purchase Anyone 0%
Short-term hire VAT-registered business 100%
Leased van VAT-registered business 100%
Any lease for business (not VAT-registered) Sole traders, small businesses 0%

EV maintenance

Can you reclaim VAT on electric car maintenance?

Absolutely, you can reclaim 100% VAT on electric car maintenance if it’s for business use.

VAT on Electric Car Charging

Is there VAT on EV charging?

Currently, there are two different VAT rates on electric car charging:

 

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Could VAT fall on public EV charging?

There’s ongoing back-and-forth with many activists, manufacturers and charging companies lobbying for a decreased public VAT.

One key player is FairCharge, led by Quentin Wilson. It has been campaigning for decreased VAT on public EV charging for years, with over 80,000 supporters.

However, despite attempts and even a second reading of a bill to cut public charging, the 20% is yet to budge, with many requests rejected. And the government announced that the standard rate remains.

Can you reclaim VAT on workplace EV charging?

It depends on the situation, but it’s said that with valid VAT receipts and specific workplace charger usage, businesses may be able to reclaim VAT.

Is there VAT on EV charger installations?

Yes, the standard 20% VAT rate applies to EV charger installation, as with any other services provided. The 20% is included in any price you see unless specified otherwise.

What about other taxes and charges on electric cars?

1. Vehicle Excise Duty (VED or Road Tax)

Before 2025, electric cars used to be exempt from Road Tax. Sadly, the exemption was revoked as more and more electric cars join UK roads (2,280,000 to date).

Still, EVs experience tax benefits, paying only £10 for the first year.

2. Pay-per-mile tax

The 3p pay-per-mile tax is coming for electric cars in 2028, on top of the road tax.

 

 

RELATED: Electric Car Rollout Incentives: Tax, Grants & More.

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