VAT Tribunal decision on EV charging: what businesses should note

The VAT First-tier Tribunal (FTT) has allowed an appeal by the taxpayer in the case of Charge My Street Ltd v HMRC, rejecting HMRC’s view that the standard rate of VAT should apply to the taxpayer’s supplies of public electric vehicle (EV) charging.

HMRC had argued that the reduced rate of VAT had been applied incorrectly and that supplies of public EV charging should instead be subject to VAT at the standard rate. The taxpayer appealed the assessment, contending that the smalls cale domestic limits were met and that the reduced rate was therefore available.

The key issue: who is the supply made to, and where?

At the heart of the dispute was the interpretation of the reduced rate provisions that apply where electricity is supplied to a person at any premises, provided the electricity (together with any other electricity supplied to that person at the premises by the same supplier) does not exceed 1,000 kilowatt hours per month.

HMRC argued that this wording should be interpreted narrowly, such that the reduced rate could only apply where electricity is supplied to a person at premises they control or have an interest in – effectively excluding public EV charging locations.

The taxpayer challenged this interpretation, arguing that the legislation does not impose any such restriction.

The Tribunal’s findings

The FTT found in favour of the taxpayer and rejected HMRC’s interpretation.

In particular, the Tribunal concluded that:

• There is no justification for interpreting “to a person at any premises” as meaning “to a person at their premises”.
• The legislation does not require the recipient of the supply to control, occupy or have a legal interest in the premises.
• The phrase “any premises” should be given its ordinary meaning, and should not be artificially restricted to buildings.
• On that ordinary meaning, “premises” can include any identifiable property, which may encompass not only buildings but also defined public spaces, such as car parks.

As a result, the Tribunal held that public EV charging locations can, in principle, fall within the scope of the reduced rate provisions, provided the relevant consumption thresholds are met.

Why this decision matters

Although this is a First-tier Tribunal decision only – and therefore binding solely on the parties involved – it is nevertheless significant.

HMRC has historically taken a restrictive approach to the application of the reduced rate for electricity in public EV charging contexts. The Tribunal’s decision directly challenges that approach and highlights that HMRC’s interpretation is not the only reasonable reading of the legislation.

For businesses operating EV charging infrastructure, this case provides welcome clarity on how the statutory wording may be interpreted and raises the prospect that the reduced rate could apply more widely than HMRC has previously accepted.

Practical implications for businesses

While the decision does not change the law, it does present an opportunity for businesses with a similar fact pattern to review their VAT position.

In particular, affected businesses may wish to consider:

• Whether their supplies of electricity for EV charging could fall within the small scale domestic limits.
• Whether the reduced rate of VAT has been incorrectly disallowed in the past.
• Whether it is appropriate to submit protective claims to preserve their position, pending any further Tribunal decisions or HMRC guidance.

Any such claims would need to be carefully assessed on a case by case basis, taking into account usage levels, supply arrangements and the specific contractual and factual circumstances.

Proceed with care

As with all Tribunal decisions at this level, caution is required. HMRC may choose not to follow the decision in other cases, and there is always the possibility of appeal or further litigation that could refine or overturn the reasoning.

We’re here to help

If you operate EV charging infrastructure or believe this decision may be relevant to your business, Azets’ VAT specialists can help you assess your position, review historic VAT treatment and consider whether protective claims or further action may be appropriate. Get in touch via the form below.