How does VAT apply when your site sells EV charging?

HMRC's published position remains that electricity sold at public EV chargepoints is standard rated, currently 20% [S1], [S2]. A tribunal decision has not changed that stated policy. First establish whether your business or the operator sells to drivers, then check registration, invoices and input VAT with your accountant before configuring your tariff. Checked October 2026.

Last checked 16 October 2026

What VAT rate applies to public EV charging sales?

HMRC’s current published policy treats electricity supplied at public chargepoints as standard rated. The standard VAT rate is 20%. That matters when your hotel, shop or car park advertises a driver price: the amount collected is not all sales income available to cover energy and maintenance. [S1], [S2]

HMRC’s 2026 brief acknowledges a First-tier Tribunal decision concerning reduced-rating arguments and says it has applied for permission to appeal. It nevertheless expressly retains its standard-rated policy. Do not change your billing system simply because a headline describes a lower rate. Your accountant should check the latest HMRC position and any subsequent decision before you act. [S1]

Read setting a public charging tariff alongside this guide. Keep customer prices, output VAT and operating margin in separate columns when reviewing an offer.

Is VAT charged on your income or the operator’s driver sales?

Start by mapping the contracts. Identify who sells charging to the driver, who collects payment, whose name appears on the receipt and what supply your host payment represents. A bank settlement labelled revenue share does not answer those questions. Notice 700 explains different invoicing treatments for agency arrangements; the legal and commercial structure matters. [S4]

Ask the operator and your accountant to complete this table before launch:

Under fully funded, part funded or self funded proposals, ownership alone should not substitute for that supply map. Ask your accountant to classify host rent and revenue-share payments separately. This guide does not assign one VAT treatment to every property agreement.

If the report only shows cash received after fees, request the underlying sales and fee records. Reconcile those records to your contract rather than treating the deposit in your bank account as the whole transaction. Use charging data and host reporting to scope the export.

How do you calculate the VAT within a charging price?

For a standard-rated VAT-inclusive price, GOV.UK’s method is to divide by 1.2 to find the VAT-exclusive amount. The difference is VAT. Adding a fifth to an already inclusive price would produce a different driver price. [S2]

Here is an illustration, not a quote, with assumed session and energy costs. A kilowatt-hour, or kWh, is a unit of electrical energy. A kilowatt, or kW, measures power; charger power does not determine the VAT fraction.

The assumed electricity cost excludes losses, standing charges and capacity charges. Software, payment fees, maintenance and host share also remain unpaid in this simplified margin. Recoverable input VAT is a separate question; the output VAT above is not necessarily the amount payable on your entire VAT return. [S4]

To redo the example, replace the tariff, delivered energy and electricity cost with your records. Ask whether the operator’s share is calculated on receipts including VAT or on VAT-exclusive sales. The wording changes the host payment even when the driver sees the same price.

When must your business register for VAT?

GOV.UK sets a registration test where total taxable turnover over the previous 12 months exceeds £90,000. There is also a forward-looking test if you expect taxable turnover to exceed £90,000 in the next 30 days. These are business turnover tests, rather than an allowance dedicated to a charger. Other registration rules can apply. [S3]

Give your accountant the charging forecast alongside your existing business sales. Ask which entity’s turnover counts and when you must review it. A site with a modest charging operation may already be VAT registered through its main trade. An entity receiving host payments needs its own assessment; do not assume the driver’s gross spend is automatically its turnover.

Can you reclaim VAT on electricity and charging equipment?

Notice 700 explains input-tax recovery and partial exemption. Recovery depends on your business circumstances, the purchases and the evidence; paying a VAT-inclusive invoice is not by itself a complete recovery test. Keep equipment, energy, service and property costs separately identifiable for your accountant. [S4]

Notice 700/64 covers business electric-vehicle use and the treatment of employee charging. Distinguish your charging sales business from staff using vehicles for business or private journeys. Home reimbursements need their own review. Do not transfer the result of a workplace benefit-tax check into the VAT ledger. [S5]

Before launch, request a sample receipt, a settlement export and a refund example. Have your accountant check that a cancelled session, reversed payment and corrected bill can be traced through the records. Agree who answers business customers requesting invoices and who retains the supporting session data.

What should you do next?

Prepare your supply map and sample tariff, then get matched with an installer that covers your area. For staff-only charging, also read charging staff at work. This is general information; check tax treatment with your accountant and contract interpretation with your solicitor.

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