From today, 1 October 2026, household electricity in Great Britain carries no VAT. The rate falls from 5% to 0% until 31 March 2027, and it covers the electricity you use to charge an electric car at home. Public chargers are a different story: they still carry 20%. Here is what the change does, what it does not do, and what it means if you drive an electric car or are thinking about one.
What has changed
| Supply | Until 30 September 2026 | 1 October 2026 to 31 March 2027 |
|---|---|---|
| Home electricity, Great Britain | 5% | 0% |
| Home gas and other home fuels | 5% | 5% (unchanged) |
| Home electricity, Northern Ireland | 5% | 5% (unchanged) |
| Public electric car charging | 20% | 20% (unchanged) |
The change is made by the Value Added Tax (Supplies of Domestic Electricity) Order 2026, which zero-rates qualifying domestic electricity supplied between 1 October 2026 and 31 March 2027. The government estimates the average household saving at around £45 a year. Whether the zero rate continues beyond March is a decision for the Budget on 28 October, and nothing has been announced.
Does it cover charging my car at home?
Yes, if your charger runs off your home's domestic supply. HMRC has not published anything specific to electric cars, and it does not need to. The zero rate applies to every supply that previously qualified for the 5% rate, and HMRC's fuel and power guidance treats a garage used with a house as part of the home. The government has also said it expects suppliers to remove VAT on fixed tariffs, which covers most dedicated EV tariffs.
In practice, check your first bill after 1 October. Electricity should show VAT at 0%. If it does not, speak to your supplier. HMRC's brief on the temporary zero rate sets out the detail.
Why your unit rate may barely move
This is the part most headlines skip. Ofgem's price cap for 1 October to 31 December 2026 sets an average electricity unit rate of 26.32p per kWh, now with no VAT. For July to September the equivalent was 26.11p per kWh including 5% VAT. Higher wholesale costs have absorbed most of the saving, and Ofgem itself says you might not see the full impact of the VAT reduction on your bill.
The fair way to read it: without the cut, your electricity would now cost 5% more than it does. For every £100 of home charging before VAT, that is £5 you are no longer paying.
Home and public charging: the gap just widened
| Where you charge | Typical price per kWh | VAT |
|---|---|---|
| Home, price cap average (October to December 2026) | 26.32p | 0% |
| Public standard and fast chargers, 3-49kW (August 2026) | 54p | 20% |
| Public rapid and ultra-rapid chargers, 50kW and above (August 2026) | 77p | 20% |
Many EV tariffs price overnight electricity well below the cap average, so for drivers with off-street parking, charging at home on an off-peak rate remains the lowest-cost way to run an electric car. Pay-as-you-go rapid charging can cost close to three times the home cap rate. HMRC's position is that public charging stays at the standard 20% rate while it seeks to appeal a tribunal decision on the point.
If you run a company car or a business
- Company car drivers who charge at home. Your home supply is domestic, so the zero rate applies. If your employer reimburses home charging using HMRC's advisory electricity rate, that rate is reviewed quarterly, so check the current figure rather than assuming it has changed.
- Directors and sole traders working from home. Charging on your home supply is covered in the same way.
- Charging at business premises. Electricity supplied to business premises stays at 20% unless it falls within the domestic limits, for example using no more than 1,000 kWh a month at a site. Small businesses, charities and care homes that already qualified for the 5% rate now pay 0%.
What to do now
- Check your October bill. Electricity should show 0% VAT.
- Use your off-peak hours. If you charge at home, make sure your tariff has a low overnight rate and set the car or charger to use it.
- Factor charging into your next car. The running-cost case for an electric car rests largely on home charging, and that case is a little stronger from today.
- Diary 31 March 2027. Unless the Budget extends it, VAT on home electricity returns to 5% from 1 April 2027.
If you are weighing up an electric car for yourself or your business, the Intelligent Vehicle Finance team can talk through charging, tax and running costs for the models you are considering. Call 01752 429950 or request a callback.
You can also browse electric car leasing, business car leasing and car leasing, read our guide to company car tax, or see why EV supply and pricing keeps moving.
Sources: The Value Added Tax (Supplies of Domestic Electricity) Order 2026 (SI 2026/987); HMRC Revenue and Customs Brief 10 (2026); HMRC VAT Notice 701/19; GOV.UK, "Breathing space on your energy bill", 26 August 2026; Ofgem energy price cap, 1 October to 31 December 2026; Zapmap Price Index, August 2026 (weighted average pay-as-you-go prices). This is general information, not tax advice.
Intelligent Vehicle Finance is a credit broker, not a lender, and receives a commission from the lender or funder when an agreement completes. A trading style of XLCR Vehicle Management Ltd, authorised and regulated by the Financial Conduct Authority (FRN 315268). Subject to status and availability.
Reviewed by Stacey Smith, Brand Director, Intelligent Vehicle Finance. Last updated: October 2026.