Andy Burnham’s New £40 Driveway Rule Change: What Households Need to Know About the October Deadline
A new government energy policy has brought potential savings for millions of households across the UK, with electric vehicle owners who charge their cars at home among those who could benefit.
The change, introduced under Prime Minister Andy Burnham, has been presented as a practical step towards reducing the cost of living. For drivers with a driveway and a home charging point, the difference could be worth up to £40 a year.
However, the headline figure does not tell the whole story. The policy is not a special £40 payment for everyone who owns a driveway. Instead, it is connected to a wider reduction in the tax charged on household electricity.
The government confirmed that VAT on qualifying domestic electricity supplies would fall from 5 per cent to zero from October 1, 2026. The temporary reduction is scheduled to remain in place until March 31, 2027.
For ordinary households, the government estimates that the measure will reduce the annual energy price cap by approximately £45. Electric vehicle owners who regularly charge at home could see additional benefits because the electricity used to power their cars is also covered by the domestic rate.
The exact saving depends on how much electricity a household consumes, the vehicle being charged and the electricity tariff being used. Some drivers may save considerably less than £40, while motorists who cover higher annual mileage could potentially benefit more.
Why drivers with driveways could benefit
Owning an electric vehicle can significantly change a household’s relationship with its electricity bill.
Rather than purchasing petrol or diesel, drivers can recharge their vehicles using electricity supplied to their homes. Those with private driveways are generally able to install dedicated charging equipment and charge their cars without relying on public charging stations.
The VAT reduction makes this arrangement more attractive.
Before the change, qualifying domestic electricity was subject to 5 per cent VAT. From October 1, the rate was reduced to zero for the temporary period announced by the government.
This means electricity used for household purposes, including qualifying home EV charging, benefits from the lower tax rate.
David Martell, chief executive of home charging company Andersen EV, has previously estimated that an average driver charging at home could save around £20 to £25 annually through the reduction. For higher-mileage motorists, the saving could approach £35 to £40.
Although this is not an enormous amount, it represents another reduction in the everyday cost of running an electric car.
For households already facing higher food prices, mortgage payments, insurance costs and energy bills, even relatively small savings can make a difference.
The policy also sends a message about the government’s approach to electric vehicle ownership. Ministers want more motorists to consider switching away from petrol and diesel, and reducing the cost of home charging could help make that decision more appealing.
October 1 was the important date
One detail households should understand is that October 1 was the date the VAT reduction came into effect.
It was not a deadline by which every driveway owner had to submit an application.
According to the government’s official guidance, households do not need to apply separately to receive the reduction. Energy suppliers are expected to apply the new VAT rate automatically to qualifying domestic electricity supplies.
The change also covers customers who have already agreed fixed electricity tariffs. Prepayment meter customers should benefit automatically when they add money to their meters.
This is important because misleading headlines can give the impression that households must complete paperwork or register their driveways before a particular date to avoid missing out.
That is not how this particular tax reduction works.
Households should nevertheless check their electricity statements and meter accounts to make sure their supplier has correctly applied the new rate.
The government has confirmed that the temporary measure is funded for the 2026-27 financial year, covering the period from October 1, 2026, to March 31, 2027.
What happens after that period will depend on further government decisions.
A growing divide between home and public charging
While the policy offers potential savings to people charging electric vehicles at home, it has also reopened an uncomfortable debate about fairness.
Not every household has a driveway.
Many people live in terraced houses, flats or properties where parking is available only on the public road. For these motorists, installing a conventional home charging point can be difficult or impossible.
They may have little choice but to use public charging stations.
The difference in VAT treatment is significant. Qualifying domestic electricity benefits from the temporary zero rate, while public EV charging continues to be subject to the standard 20 per cent VAT rate.
Consequently, two drivers using electricity to power similar vehicles can face different tax costs depending on where they charge.
Critics argue that this creates a driveway divide, giving an additional financial advantage to people who already have private parking.
The concern is particularly relevant for lower-income households. People who cannot afford a property with a driveway may also be the people most sensitive to the higher cost of public charging.
Industry representatives have therefore called for the government to consider further measures to reduce the gap between domestic and public charging prices.
Their argument is straightforward: encouraging the transition to electric vehicles should not depend so heavily on whether someone owns a house with off-street parking.
New rules could help households without driveways
The government has also introduced a separate change intended to improve access to home charging for people who park on the street.
From October 21, 2026, qualifying cross-pavement EV charging installations can be carried out without the traditional planning permission requirement.
These systems allow electricity cables to pass beneath a pavement through an approved solution, connecting a property to a vehicle parked outside.
The aim is to make home charging more accessible to residents who do not have private driveways.
The Department for Transport says the planning changes could save drivers up to £300 in installation costs.
However, this does not mean anyone can simply place a cable across a public pavement. Installations must still meet relevant safety requirements and receive approval from the local highway authority.
There are also exceptions. Properties in conservation areas and listed buildings may still require planning permission, depending on the circumstances and the proposed installation.
This means households should contact their local authority before arranging any work.
The new arrangements could make a genuine difference for some drivers, but their effectiveness will depend partly on how consistently local authorities process applications and approve suitable installations.
What households should check now
With the October changes already in force, households interested in reducing their charging costs should focus on a few practical points.
First, check whether the property has a qualifying domestic electricity supply. The zero-rate VAT measure applies to qualifying domestic electricity in England, Scotland and Wales. Northern Ireland has different VAT arrangements.
Second, check the electricity bill to confirm that the supplier has applied the new VAT treatment from October 1.
Third, electric vehicle owners should review their tariffs. Some suppliers offer specialist overnight charging rates that can make home charging cheaper, particularly for motorists who can schedule charging sessions outside peak hours.
Fourth, households without driveways should investigate whether an approved cross-pavement charging solution is possible in their area.
It is important not to assume that every property will qualify. Pavement design, road safety, local authority requirements and conservation restrictions can all affect whether an installation is permitted.
Will the £40 saving make a difference?
The prospect of saving £40 a year is unlikely to transform the finances of most households.
Nevertheless, the wider policy has implications beyond the individual amount.
The reduction in domestic electricity VAT is intended to help households manage energy costs during a difficult period. For electric vehicle owners, it also reduces one part of the cost of running their vehicles.
The bigger question is whether the government can make electric motoring affordable for people who cannot charge at home.
If public charging remains considerably more expensive, the financial benefits of electric vehicle ownership may continue to be unevenly distributed.
That could become an important political issue as ministers attempt to increase electric vehicle adoption while convincing motorists that the transition is fair.
For Andy Burnham, the challenge will be balancing immediate household savings with the longer-term investment needed to improve charging infrastructure.
The October changes represent two different approaches to the same problem: reducing the cost of domestic electricity and making home charging more accessible.
For households with driveways, the VAT reduction has already begun to take effect automatically. For those without private parking, the new cross-pavement rules could offer another route towards cheaper charging, provided their property and local authority meet the necessary requirements.
The most important point is that the £40 figure is an estimate for some electric vehicle drivers, not a guaranteed payment for every driveway owner. The October 1 date was the start of the tax reduction, not an application deadline.
As the temporary measure continues through the winter, households will be watching closely to see whether the savings appear on their bills — and whether the government takes further action to ensure that motorists without driveways are not left paying more simply because of where they live.