Andy Burnham Gives 1.52p Per Mile Charges to Households With Driveways From October 1

A major change to household electricity taxation is set to take effect across Great Britain on October 1, creating a significant knock-on effect for electric vehicle drivers who charge their cars at home.

The policy has generated headlines suggesting that Prime Minister Andy Burnham is introducing a new 1.52p-per-mile charge for households with driveways. However, that interpretation is incorrect. There is no new road or driveway charge of 1.52p per mile.

Instead, the figure refers to the potential cost of driving an electric vehicle when it is charged at home using particularly low-cost electricity tariffs. The underlying policy is a temporary removal of VAT from qualifying domestic electricity supplies.

The change was announced by the government in July and is scheduled to run from October 1, 2026, until March 31, 2027. HM Revenue & Customs has confirmed that qualifying domestic electricity supplies in Great Britain will temporarily be subject to a zero VAT rate during this period.

What Changes on October 1?

At present, qualifying domestic electricity is generally subject to VAT at 5 percent. From October 1, that rate will temporarily fall to zero in England, Scotland and Wales.

The government says the measure is intended to provide relief to households facing high energy costs. The House of Commons Library reports that the government estimated the change would reduce the average annual electricity bill by around £45, although the actual amount saved by an individual household will depend on electricity consumption and tariff arrangements.

Ofgem has incorporated the VAT change into the energy price cap calculations for the period from October 1 to December 31.

However, households should not assume that the VAT reduction will automatically mean their total energy bill falls by £45 during those three months. Ofgem has also announced that the energy price cap will rise by 4 percent for a typical household using electricity and gas and paying by Direct Debit.

For electricity, the average capped unit rate will be 26.32 pence per kWh, excluding VAT because the temporary zero rate applies. Gas remains subject to 5 percent VAT.

That distinction is important when considering the effect on household finances.

Where Does the 1.52p Figure Come From?

The 1.52p-per-mile figure relates specifically to electric vehicles.

Drivers who have access to a driveway, garage or another form of off-street parking can often charge an electric car at home. Domestic electricity is substantially different from electricity sold through public charging networks when it comes to VAT treatment.

HMRC guidance confirms that electricity supplied through qualifying domestic use will temporarily receive the zero VAT rate. However, electricity supplied through public EV charging points remains standard-rated for VAT purposes.

That creates a potentially significant difference for EV owners.

One calculation reported in July suggested that an electric vehicle using a particularly cheap home-charging tariff could cost around 1.52p per mile after the VAT reduction, assuming the energy supplier passes the full saving through to customers.

The precise figure is not universal. It depends on the electricity tariff, the vehicle’s efficiency, battery size, driving conditions and charging losses.

In other words, 1.52p is an example rather than a government-set mileage rate.

There is therefore no government bill arriving at households demanding payment based on how many miles they drive.

Reuters Fact-Checks the Driveway Claim

The confusion became significant enough to prompt a Reuters fact check.

Reuters reported that social-media users had interpreted a headline about a “1.52p per mile” plan as meaning that households with driveways were being subjected to a new charge.

Reuters concluded that the claim was misleading. The government was reducing VAT on household electricity rather than introducing a new charge on households with driveways.

That distinction matters because the policy actually reduces the tax applied to qualifying domestic electricity.

For an electric vehicle owner charging at home, the result could be lower charging costs. But for somebody without off-street parking who depends on public charging, the same VAT advantage does not apply in the same way.

The Growing “Driveway Divide”

While there is no driveway charge, the policy has nevertheless raised questions about differences between motorists who can charge at home and those who cannot.

Public charging remains subject to 20 percent VAT. HMRC’s updated guidance specifically states that recharging electric vehicles at public charging points is treated as standard-rated for VAT purposes.

That means two motorists using electricity to power similar electric cars can face different tax treatment depending on where they plug in.

A driver with a driveway may be able to use a domestic electricity tariff, including cheaper overnight EV tariffs. Someone living in a flat or terraced property without suitable parking may have to rely on public charging infrastructure.

Industry representatives have argued that this difference could make the transition to electric vehicles less equal for people without private parking.

Melanie Lane, chief executive of Pod, was quoted by Birmingham Mail as warning that the policy could increase the disparity between drivers able to charge at home and those dependent on public charging points.

The argument is not that the electricity itself is fundamentally different. Rather, it concerns the different VAT treatment attached to domestic and public charging.

What Does It Mean for EV Drivers?

For an electric vehicle owner who charges predominantly at home, the October change could produce a modest reduction in running costs.

Recent industry estimates reported by UK media have suggested that an average home-charging EV driver could save around £20 to £25 a year from charging alone, with higher-mileage drivers potentially saving more.

The exact amount will vary considerably.

Someone using a very cheap overnight electricity tariff could already be paying considerably less than a driver relying on a rapid public charger. Removing VAT from domestic electricity could therefore widen the difference.

For example, a driver charging a large battery at home might pay significantly less per full charge than someone using an expensive rapid charger away from home.

However, the 1.52p-per-mile figure should not be treated as a standard national EV running cost. A different vehicle or tariff could produce a substantially different result.

The Policy Is Temporary

Another important detail is the duration of the measure.

The zero VAT rate for qualifying domestic electricity is currently scheduled to apply from October 1, 2026, until March 31, 2027.

The government has described the measure as immediate cost-of-living support. Its longer-term position will be considered alongside future fiscal decisions.

The House of Commons Library notes that any changes beyond the 2026/27 financial year are expected to be addressed through the government’s wider Budget process.

That means households should distinguish between a temporary tax reduction and a permanent change to the structure of electricity taxation.

October Bills Will Still Depend on Energy Prices

The VAT reduction also does not exist in isolation.

Ofgem has warned that the energy price cap will rise between October and December because of higher wholesale energy costs. The regulator says the typical household using electricity and gas on a default tariff and paying by Direct Debit will see average energy prices rise by 4 percent compared with the previous period.

Consequently, the effect of the VAT cut on a household’s overall finances will depend on several factors.

Electricity-heavy households may see a more noticeable benefit because the tax reduction applies directly to electricity consumption. Households that use relatively little electricity may see a smaller effect.

Gas users should also remember that the temporary zero rate does not apply to domestic gas. Gas continues to carry VAT at 5 percent.

A Cost-of-Living Measure With an EV Side Effect

The government’s primary stated purpose is to reduce household electricity costs rather than subsidise electric vehicles specifically.

When Burnham announced the measure in July, the government described it as an immediate response to pressure on household bills. It said the VAT reduction would provide millions of households with additional breathing space during the winter.

The EV benefit is therefore a consequence of the way electric vehicles are charged.

Because many EV owners charge at home, a reduction in domestic electricity taxation naturally lowers the cost of powering their vehicles.

That is why the 1.52p-per-mile figure has attracted attention.

But describing it as a new “charge” for households with driveways reverses the actual direction of the policy.

What Households Should Expect From October 1

From October 1, households in Great Britain using qualifying domestic electricity supplies will see the VAT rate temporarily reduced from 5 percent to zero.

EV owners who charge at home could consequently pay less for electricity used to power their cars.

The amount saved will depend on their supplier, tariff, electricity consumption and vehicle efficiency.

Drivers using public charging points will not receive the same VAT treatment because public EV charging remains subject to the standard 20 percent VAT rate.

There is therefore no new 1.52p-per-mile driveway tax.

Instead, the figure represents an estimated running cost that some electric vehicle drivers may achieve through low-cost domestic charging after the VAT reduction.

For households, the broader story is a temporary electricity tax cut beginning October 1. For EV owners with private parking, it could also mean cheaper home charging. For drivers without access to off-street parking, however, the continuing difference between domestic and public charging VAT remains an important part of the debate over the UK’s electric vehicle transition.

The policy will therefore be closely watched not only for its impact on household energy bills, but also for what it reveals about the growing difference between motorists who can charge at home and those who depend on the public charging network.