Andy Burnham’s £13 rule change for people with driveways

Andy Burnham is set to oversee a new driveway rule change for motorists in a matter of days as part of major updates to the domestic electricity tax. The Prime Minister will update domestic VAT electricity rates, slashing costs from 5% down to 0% starting October 1.

The decision will have a direct knock-on effect for electric vehicle owners charging at home on their driveway, lowering overall running costs. According to analysis from New Automotive, EV owners using a dedicated charger on a standard tariff stand to save roughly £27 per car each year. However, drivers who use a special dedicated off-peak EV tariff will see less dramatic savings, coming in at just £13 per car per year.

New Automotive explained that because these specialised off-peak tariffs are already heavily discounted, there was simply less VAT left to abolish. Despite the smaller cut, this group represents the majority of EV drivers, with an estimated 934,000 households charging this way.

Beyond base tariff estimates, industry analysts emphasised that any savings figure is purely an educated guess. Due to the fact that outcomes depend on individual factors such as annual mileage, energy plans and battery capacity, projected savings vary widely. Estimates range from £13 per year for drivers on off-peak tariffs to £21 per year for alternative home setups, while Andersen EV CEO David Martell calculated typical savings at £20 to £25 per year, rising to £40 for high-mileage drivers.

At the higher end, Carwow’s calculations showed that drivers topping up a large 100kWh battery once a week could save around £65 annually under the 0% VAT rate. Ultimately, predicted savings range from £13 to £65, depending entirely on how and when a driver charges.

Tanya Sinclair, CEO of Electric Vehicles UK, told the Express that she welcomed the decision: “Cutting VAT on household electricity makes driving electric even cheaper, with EV owners who charge at home saving up to £27 a year from the tax cut alone”.

Robin Heap, CEO of EV charging firm Zest, also called the policy “good news for EV drivers with a driveway”.

While the tax cut promises lower bills for domestic users, it also highlights a growing divide among road users. Because the 0% VAT rate applies strictly to domestic electricity supplies, motorists who rely on public charging bays will miss out on the tax relief entirely. Public charging points remain subject to a 20% VAT rate, further widening the financial gap between drivers with private driveways and those without.