VAT on your home electricity is dropping to zero from October 2026

What changes in Great Britain

Qualifying supplies of domestic electricity in Great Britain move to a zero rate of VAT from 1 October 2026. A qualifying supply is electricity billed to a domestic customer at their home, which is the same supply that feeds a charger on the drive as feeds the kettle and the immersion heater. The zero rate runs until 31 March 2027.

Northern Ireland keeps its own rate

The zero rate applies in Great Britain only. Domestic electricity in Northern Ireland stays on the reduced rate of 5%, so a household there continues to pay VAT on the electricity used to charge a car at home, while a household in Great Britain, for the same period, does not.

Public charging stays at the standard rate

None of this touches electricity bought at a public charge point. That electricity is billed as a commercial supply, so it carries VAT at the standard rate whichever part of the UK the charge point sits in. The change reduces the cost of charging at home; it leaves the cost of charging on the road as it was.

The payback calculation behind a home charge point answers one question: how many months of charging does it take before the saving against public charging covers the cost of fitting the unit. That saving is built from two running costs, the price per unit of electricity at home and the price per unit away from it, and a change to either one moves the answer.

Why the gap between home and public charging widens

Removing VAT from a domestic electricity bill lowers the cost side of the equation reader enters for home charging, while the cost of charging away from home is unaffected. A lower home-charging cost against an unchanged public-charging cost means a bigger monthly saving, and a bigger monthly saving means fewer months until the charger has paid for itself.

The size of that shift depends on how much of your driving you currently do on public charging, because the saving only applies to the miles you move from one to the other.

What changes again when the zero rate ends

The zero rate on qualifying domestic electricity is not permanent. When it ends on 31 March 2027, the home-charging side of the sum rises back to its earlier cost.

A payback figure calculated in late 2026 or early 2027 will look better than a payback figure calculated after the rate reverts, even where every other input, your mileage, your tariff, the price of the charger, stays the same. Anyone weighing a purchase across that boundary is really comparing two different cost bases.

A calculator built around these figures still depends on what you put into it. Your own mileage, your own tariff and the price you are actually quoted will move the result, sometimes a long way from a default, and the figure it returns is only as good as those inputs.