Scott Harwood explains how the charging of electric vehicles is creating uncertainty when it comes to the VAT rules.
When new technology or innovative business models appear in the marketplace, it often takes time for the VAT rules to catch up, and the charging of electric vehicles (EVs) looks set to be no exception.
According to industry estimates, there are already more than one million full EVs on the road in the UK, plus a further 655,000 plug-in hybrids. Although vehicles that can use charging points currently make up only 5% of all vehicles, that proportion is rapidly growing and demand for car charging is sure to grow with it.
While the market remains relatively new, some important issues have already come to light related to the VAT position of EV charging, identifying likely areas of complexity and potential dispute. Businesses that provide, use or are involved in the supply chain of EV charging should check their VAT position and ensure they are prepared for how things are likely to evolve in the coming months and years.
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