Andy Burnham has introduced a new regulation affecting motorists with driveways. The Prime Minister slashed VAT rates on domestic electricity charging from October 1, dropping rates from 5% to 0%. The initiative aims to help households combat rising electricity bills during the cost-of-living crisis, while also supporting electric car owners who charge their vehicles at home. Drivers will witness the average cost of charging their EV on their driveway decrease under the new regulation.
Taking a Volkswagen ID. 3 150kW Match Pro S 79kWh 5dr Auto as an example, LeaseElectric said motorists charging with the EDF Energy Go Electric with Pod Point tariff will now pay just 1.89p per mile.
This represents a reduction from the previous rate of 1.97p. Over 10,000 miles, the saving means road users will pay approximately £189 to use the road, rather than £198.
Nevertheless, costs will differ depending on the particular tariff that road users have selected. Those charging the Volkswagen EV using the Good Energy EV Tariff could pay as little as 1.47p per mile, down from 1.54p per mile before the reduction.
LeaseElectric said: “For millions of households, this means lower electricity bills heading into winter. For electric vehicle drivers, however, it means something even more significant: charging an electric vehicle at home is about to become even cheaper.
Andy Burnham is introducing a new rule. (Image: Getty)
The initiative aims to help EV owners. (Image: Getty)
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“Because most EV owners charge their vehicles at home, removing VAT from domestic electricity means every home charge will cost less from 1 October 2026.”
Experts at Andersen EV have previously warned that some high-mileage motorists could save as much as £40 per annum due to the new VAT updates.
The development will prove unwelcome to those without a driveway or off-street parking and who rely on public charging points for their vehicles.
Electricity charges will remain unchanged at public plugs, with road users continuing to pay 20% VAT when topping up. The new regulation means the “driveway divide” between home rates will significantly widen.
Andy Burnham Introduces New £1.98 Driveway Rule – What It Means for Drivers Starting in October
A new change affecting electric-car owners has attracted attention across Britain, with motorists being urged to understand how changes to electricity taxes could influence the cost of charging their vehicles at home. Although some headlines describe it as Andy Burnham’s new “£1.98 driveway rule”, the reality is more complicated: there is no universal £1.98 fee for owning or using a driveway. Instead, the figure relates to reported electric-car charging costs, while a separate set of rules governing pavement-crossing charging cables is also due to change.
The developments come as the government attempts to reduce household energy costs, encourage the use of electric vehicles and address concerns about the affordability of public charging. However, the benefits will not be distributed equally. Drivers with suitable off-street parking may find it easier to take advantage of cheaper home charging, while those who depend on public charging points could continue to face higher costs.
For motorists already struggling with the cost of living, the important question is not simply what the new rules are called, but how they will affect their household budgets.
What Is the £1.98 Driveway Rule?
The headline refers primarily to the government’s decision to remove VAT from qualifying domestic electricity supplies from 1 October 2026. The change reduces the VAT rate from 5% to zero for qualifying household electricity supplies in England, Wales and Scotland. The measure is temporary under the legislation currently in force, covering supplies made between 1 October 2026 and 31 March 2027. <Cite refs={[“turn841679search1″,”turn841679search2”]} />
The policy was announced as a measure to help households facing higher energy costs. Because many electric-car owners charge their vehicles using electricity supplied to their homes, the reduction can also lower the cost of charging at home.
However, this is not a special tax exemption that applies only to driveways. It is a change to the VAT charged on qualifying domestic electricity. Drivers who charge their vehicles at home may benefit, whether their charging point is installed beside a driveway or in another suitable private parking area.
The £1.98 figure should therefore not be interpreted as a mandatory payment, a new parking charge or a fixed annual saving guaranteed to every motorist. Reports have used particular electric-car models and electricity tariffs to illustrate how charging costs may change. The actual benefit depends on electricity consumption, the tariff and the vehicle being driven.
That distinction matters because a dramatic headline can easily leave drivers believing that a new fee has been imposed on every home with a driveway, when the principal change is actually a reduction in domestic electricity VAT.
How Much Could Electric-Car Owners Save?
The government’s wider policy aims to provide some relief from household energy costs. Official guidance estimates that removing VAT from domestic electricity could save the average household around £45 per year, although the precise amount will depend on electricity prices and consumption. Customers do not need to submit a separate application to claim the reduction; suppliers are expected to apply the new rate to qualifying bills. <Cite refs={[“turn841679search0″,”turn841679search1”]} />
Electric-car owners could receive an additional benefit through the electricity they use for charging.
A report using a Volkswagen ID.3 as an example said that a driver on a particular EDF electric-vehicle tariff could see the estimated charging cost fall from approximately 1.97 pence per mile to 1.89 pence per mile. The same report illustrated how charging costs can differ depending on the tariff selected. These are examples, not guaranteed rates for all electric vehicles. <Cite refs={[“turn682878search0″,”turn682878search5”]} />
For a driver covering thousands of miles each year, even a small reduction in the cost per mile may gradually add up. People who charge frequently at home could be better placed to benefit than motorists who use their vehicles only occasionally.
Nevertheless, drivers should not assume that every electricity bill will fall by the same amount. The final saving depends on the price charged by the energy supplier, how much electricity the household consumes and whether the driver uses a domestic tariff or a public charging network.
The government has also made clear that the VAT reduction is funded for the 2026–27 financial year. Its longer-term position will depend on subsequent decisions about public finances and household support. <Cite refs={[“turn841679search0″,”turn841679search2”]} />
Why Drivers Without Driveways May Feel Left Behind
One of the most contentious aspects of the policy is the difference between charging at home and using public charging points.
Drivers with suitable off-street parking can often install a dedicated charger and choose when to charge their vehicles. Those without a driveway may have to rely on public charging facilities, depending on the parking arrangements available where they live.
Public charging can involve different electricity prices, network fees and VAT treatment. HMRC guidance published earlier in 2026 stated that public charging electricity was generally subject to the standard 20% VAT rate under the position then in force, although the tax treatment was subject to legal developments and an appeal process. <Cite refs={[“turn841679search5″,”turn841679search7”]} />
That difference has fuelled concerns about a growing “driveway divide”. A household with private parking may be able to charge overnight using a home tariff, while a driver living in a flat or a terraced house without off-street parking may have to use a public charger.
For those drivers, the cost of switching to an electric vehicle can be harder to manage. They may face higher charging prices, fewer convenient charging locations and the inconvenience of planning journeys around available charging points.
The concern is not that every driver without a driveway will necessarily pay more in every circumstance. Charging prices vary considerably. The broader issue is that access to cheaper home charging is uneven, meaning that people with similar transport needs may face very different costs.
If the government wants electric vehicles to become accessible to a wider range of households, expanding reliable and affordable public charging will be an important part of the challenge.
A Separate Change to Pavement-Crossing Charging Cables
The VAT reduction is not the only development affecting motorists this October.
A separate planning amendment, due to take effect on 21 October 2026 in England, changes the rules governing certain electric-vehicle charging installations. It introduces requirements for authorised cross-pavement solutions where a charging cable needs to cross a footway between a property and a parked vehicle. The relevant legislation also sets conditions for certain charging installations and restricts some permitted development rights, including in conservation areas. <Cite refs={[“turn841679search3″,”turn841679news8”]} />
The aim of a cross-pavement solution is to allow residents without driveways to charge electric vehicles from their homes without leaving loose cables across a public footpath. A suitable channel embedded in the pavement can provide a safer route for the cable, subject to the relevant permissions and requirements.
This is important because trailing cables can create trip hazards for pedestrians, including people with visual impairments, wheelchair users and parents pushing prams.
However, the new arrangements do not mean every resident can automatically install a charging channel outside their home. The precise rules depend on the location, the installation and the applicable planning and highway requirements. Residents in conservation areas may face additional restrictions and may need to seek permission.
Drivers considering an installation should check the latest guidance from their local authority before paying for equipment or arranging work. They should also confirm who is responsible for authorising the pavement installation and maintaining it safely.
The change could improve access to home charging for some residents, but it could also create additional costs and delays for those whose properties do not meet the relevant conditions.
What Does This Mean for Andy Burnham?
The changes present the government with both an opportunity and a political challenge.
Reducing VAT on domestic electricity gives Burnham a clear message to communicate: households should not have to shoulder unnecessary costs during a period of financial pressure. For electric-car owners who charge at home, the reduction offers an additional benefit alongside the wider effect on household electricity bills.
But motorists will judge the policy by what they actually experience. A reduction in VAT may be welcome, yet it will not necessarily solve the larger problems associated with expensive public charging, limited infrastructure or the upfront cost of buying an electric vehicle.
Critics may argue that the government is offering an uneven benefit because households with private parking are better placed to take advantage of home charging. Supporters will counter that lowering domestic electricity costs helps a much wider group of households, not just electric-car owners.
The separate pavement-charging changes create another test. If they allow more people to charge vehicles safely outside their homes, they could help make electric motoring more practical. If the rules prove difficult to navigate or installations are expensive, some households may remain excluded.
For Burnham, the task will be to demonstrate that the government’s policies work together. Tax reductions, charging infrastructure and practical planning rules must support a coherent approach rather than leave motorists trying to understand a series of disconnected announcements.
What Should Drivers Do Now?
Motorists do not need to panic about the so-called £1.98 rule. There is no general driveway fee created by the domestic electricity VAT reduction.
Electric-car owners who charge at home should check their electricity bills from 1 October and confirm that their supplier has applied the appropriate VAT treatment. They can also compare available tariffs, paying attention to standing charges, off-peak rates and any conditions attached to electric-vehicle charging plans.
Drivers who rely on public chargers should compare prices across networks and consider whether any available local charging options offer better value. They should not assume that the VAT reduction on domestic electricity will automatically reduce every public charging price.
Anyone without off-street parking who wants to install a pavement-crossing solution should check local authority requirements before proceeding. The new rules are technical, and the suitability of an installation depends on the property and the location.
A Small Tax Change With Bigger Questions
The new October arrangements highlight a wider question about the future of motoring in Britain. Electric vehicles can offer lower running costs for some drivers, but the savings depend heavily on where and how they charge. A household with private parking may enjoy convenient home charging, while another household with similar travel needs may depend on more expensive public infrastructure.
Removing VAT from domestic electricity is a genuine tax change, not a new driveway charge. It may help households and make home charging cheaper, but it does not guarantee identical savings for every motorist.
The separate changes to pavement-crossing installations could help address the practical difficulties faced by residents without driveways, although planning restrictions and installation costs remain important considerations.
Ultimately, drivers will judge the government on whether these measures make everyday transport more affordable, convenient and fair. If the savings reach households and access to charging improves, the changes may prove beneficial. If motorists continue to encounter high public charging prices and confusing restrictions, the government will face pressure to do more.
For now, the best advice is to separate the dramatic headline from the actual rules: check the electricity VAT change, understand your charging costs and seek reliable local guidance before installing equipment. The important issue is not the label attached to the policy, but whether it delivers a meaningful benefit to drivers across the country.