Andy Burnham’s new driveway rule update this October is great news for some EV owners, but others will be confused why they are paying a lot more.
Andy Burnham’s new rule change has widened the ‘driveway divide’ (Image: Getty)
Andy Burnham’s new driveway rule changes introduced this October are hitting some UK motorists with a staggering £2,060 penalty, according to new analysis. The Prime Minister slashed VAT rates on domestic electricity on October 1, with rates cut from 5% to 0%. Although aimed at cutting electricity bills, the new update will have a knock-on effect for anyone charging their electric car at home.
Those topping up on their driveway are likely paying just 7p per kWh due to the lower VAT rates, around 2p per mile. However, the same can’t be said for the millions of road users without access to off-street parking.
Many of these are still relying on public charging bays to top-up tier cars despite VAT at 20% and rates closer to 50p per kWh. There had been pressure from the car industry to bring public charging rates into line with domestic rates, but what Mr Burnham did was actually extend the so-called “driveway divide”.
New analysis from costpermile.co.uk found that a homeowner topping-up at home using a smart charging tariff would pay around £200 per year in electricity fees. Meanwhile, those relying on rapid chargers in the community would be splashing out over £2,200 per annum.
Experts at costpermile.co.uk said: “A homeowner with a driveway charging their EV overnight spends just £200 annually in electricity. A terraced-home dweller who drives the exact same 10,000 miles but relies on public rapid chargers spends £2,260 annually — paying an extra £2,060 every year simply because they park on the road.”
Driveway VAT fees changed from October 1 (Image: Getty)
Hippo Leasing has also warned that Mr Burnham’s decision to cut domestic VAT instead of tackling the 20% VAT fees could cost some drivers hundreds of pounds.
Tom Preston, Chief Executive Officer at Hippo Leasing previously warned that the current 20% VAT rate on public EV charging costs effectively “penalises motorists who don’t have a driveway”.
Tom added: “Equalising public charging VAT with the 5% domestic rate could save high-mileage EV drivers around £389 a year, making electric leasing far more accessible for urban households.”
However, the Government has stressed that the VAT tax cut will help households with their energy bills, taking around £45 off the yearly Ofgem price cap.