The UK Government has committed more than £13 to keeping petrol and diesel cheaper for every £1 allocated to making public electric vehicle (EV) charging more affordable, according to analysis by independent transport research organisation New AutoMotive. Its figures put the cost of extending fuel duty relief at £1.35 billion, against £100 million for local public charging.
EV industry groups have criticised the Budget for keeping VAT on public charging at 20%, while extending tax relief for fuel and for home electricity. They argue that the measures favour drivers who can charge at home over those who rely on public chargepoints.
How fuel duty relief compares with charging support
New AutoMotive based its analysis on the Treasury’s policy costings in the Budget 2026 document. The forecast Exchequer cost of the fuel duty measure is £575 million in 2026/27 and £780 million in 2027/28, a total of £1.355 billion. Compared with the £100 million public charging commitment, this works out at approximately £13.55 for every £1, according to the organisation’s calculation.
The Government is extending the existing 5p-per-litre fuel duty cut until July 2027. The £100 million for local public charging is spread over two years.
Tanya Sinclair, CEO of Electric Vehicles UK, said: “The Chancellor is throwing good money after bad. Instead of investing in a future where drivers are less exposed to volatile oil prices, he’s spending billions cushioning the cost of staying dependent on them.”
She added: “Nobody wants motorists paying more at the pump, but there is a difference between protecting drivers today and helping them escape high fuel costs tomorrow. Keeping public charging VAT at 20% while extending fuel duty relief is a missed opportunity to make cleaner motoring fairer. The Government talks about making the switch to electric easier, but its tax policy tells a very different story.”
Public charging VAT stays at 20%
The Budget also extends the temporary 0% VAT rate on domestic electricity until July 2027. As a result, motorists who rely on public charging face a substantially higher tax rate than those able to charge at home. Climate Global News has previously reported on analysis estimating that EV drivers without driveways pay £172 million a year in VAT on public charging.
Oliver Brighton, CFO of chargepoint operator char.gy, said: “The Chancellor has found room to extend tax relief for petrol and diesel drivers, but not to fix the unfair tax treatment of public EV charging. If you have a driveway, your electricity attracts 0% VAT for now. If you don’t, you’re charged 20% at a public charger. It’s the same electricity powering the same type of car. Why should where you park determine how much tax you pay? The Government has acknowledged the problem, but today’s Budget leaves that fundamental unfairness untouched.”
£100 million to cut local charging costs
The Government’s £100 million commitment is intended to reduce the cost of local, lower-powered public charging. Eligible drivers are estimated to save around £150 a year from spring 2027.
A new taskforce will also examine whether motorists could use their domestic electricity tariffs at local public chargers. The measures follow the Department for Transport’s Cost of Public Electric Vehicle Charging Review, published in October 2026.
However, industry representatives pointed out that neither measure delivers an immediate reduction in public charging VAT, and that the funding does not directly address the economics of ultra-rapid charging infrastructure.
Concerns over confidence in the EV transition
Ginny Buckley, Chief Executive of the electric car buying and advice site Electrifying.com, said: “Imagine paying more tax on electricity simply because you don’t have a driveway. That’s effectively what millions of EV drivers are being asked to accept.”
She added: “We should be making electric cars an easy choice for ordinary families. Instead, we’ve got a confusing patchwork of promises, with the biggest savings still reserved for people who can plug in at home.”
The decisions come ahead of the planned introduction of mileage-based Electric Vehicle Excise Duty from April 2028 and further increases in company car tax rates. Industry leaders warn that unequal charging taxation combined with additional motoring costs risks undermining confidence in the transition, particularly among households without off-street parking.
The groups are calling for a more consistent approach to motoring taxation that protects drivers from high costs while making cleaner alternatives affordable and accessible to everyone.
Frequently asked questions
How much is the Government spending on fuel duty relief compared with public EV charging?
New AutoMotive’s analysis of Budget 2026 costings puts the cost of extending fuel duty relief at £1.35 billion across 2026/27 and 2027/28, compared with £100 million over two years for local public charging. That is more than £13 for every £1.
What VAT rate applies to public EV charging after Budget 2026?
Public EV charging remains subject to 20% VAT. Domestic electricity continues to benefit from a temporary 0% VAT rate, which has been extended until July 2027.
How long has the 5p fuel duty cut been extended?
The Government is extending the existing 5p-per-litre fuel duty cut until July 2027.
What will the £100 million public charging commitment do?
It is intended to reduce the cost of local, lower-powered public charging, with estimated savings of around £150 a year for eligible drivers from spring 2027. A taskforce will also examine whether motorists could use their domestic electricity tariffs at local public chargers.
When will mileage-based Electric Vehicle Excise Duty be introduced?
Mileage-based Electric Vehicle Excise Duty is planned to be introduced from April 2028.
