Helping you prosper
HMRC’s current guidance says that the charging of electric vehicles at charging points situated in various public places is standard rated for VAT purposes, regardless of the quantity of electricity supplied as these supplies are not made to a person’s house or building. If supplied for ‘qualifying use’ (which means domestic use or charity non-business use) in small ‘de minimis’ quantities, reduced VAT rating (at 5%) can apply.
A recent First Tier Tribunal (FTT) case Charge My Street Limited v HMRC [2026] (TC09802) considered the VAT liability of electricity supplied through Charge My Street Limited (CMS)’s public electric vehicle charging points and agreed with CMS that in certain specific circumstances, this was reduced rated, disagreeing with HMRC’s standard rating position.
Summary of the case
CMS’s charging points were community focussed, therefore located in public places such as hotels, supermarkets and public car parks for ease of access for users. These typically charge lower rates than electric vehicle charging points located at places such as motorway service stations.
Persons with home charging points can normally obtain lower tariffs/charging rates (for domestic use) but as not all people have access to charging points at home, they need to charge their vehicles using such public charging points.
CMS considered that some of its supplies of electricity (made via one particular third-party app provider) should be deemed domestic supplies and thus qualify for the 5% VAT rate (in the same way as home charging).
HMRC disagreed and considered that as the electricity was not supplied to the user’s own property, CMS’s supply of public charging was not deemed to be for domestic use and therefore subject to VAT at the standard rate (currently 20%) as set out in paragraph 3.2.2 of HMRC’s VAT Notice 701/19.
CMS still felt that the legislation at Schedule 7A, Group 1, Item 1 VAT Act 1994 supported 5% being applicable, as Note 5(g) allows for certain de minimis levels of fuel to be deemed to be for domestic use (i.e. where the electricity was not provided at a rate exceeding 1,000 kilowatt hours a month). However, HMRC disagreed, viewing that under the contractual terms and conditions, CMS’s supplies of electricity were actually being made to the EV App provider, who in turn supplied charging services to the driver. HMRC said that even if they accepted CMS was supplying the drivers, HMRC did not interpret the meaning of Note 5 in the same way as CMS (as premises needed to be buildings which were own premises for the de minimis provision to be in point).
The FTT noted that many of the drivers paid for the electricity using this particular third-party app provider (via Stripe, which then paid the monies to CMS and invoiced CMS for their own software services). However, as the arrangement for supplies via this app provider did not reflect the contractual terms and conditions, the FTT was required to look at the commercial and economic reality of what was being supplied and to whom. The view of the FTT was that premises could include public locations such as car parks, that there is no requirement for the supply to be to the customers own premises, and that the 1,000 kWh/month is a monthly de minimis limit (not prorated to 32kWh per day as suggested by HMRC as this is not supported by VAT legislation). It was therefore decided that in the case of that particular app provider, where the de minimis test was met and a deemed domestic supply arose, CMS was supplying reduced rated electricity to the drivers, and the app provider (acting as a commission agent) provided a standard rated software service to CMS.
The FTT did not consider the VAT liability of supplies of electricity which CMS made via other third-party app providers; therefore, CMS’s appeal was allowed in part. However, the FTT indicated the need to establish if those other app providers similarly acted as commission agent or alternatively as principal (i.e. where CMS would instead be making standard rated supplies to the app provider who would in turn make supplies to the drivers).
Our comments
It is understood that HMRC will be appealing the CMS FTT decision. The FTT decision itself does not carry force of law, so the position is being monitored with significant interest by various industry leaders and operators within the charging sector as well as wider campaign groups.
As the VAT liability will always depend on the precise fact pattern, the CMS ruling may not result in any reduced rating benefit for other similar operators (especially if electricity is not being supplied directly to the drivers but to an app provider). However, there may be scope for suppliers on all fours with CMS’s situation to consider submitting VAT repayment claims to HMRC (pending the outcome of any appeal by HMRC) if able to fully evidence the factual and commercial arrangements, as well as monthly usage by drivers. Any VAT repayment would be subject to proving no unjust enrichment to HMRC (i.e. any overcharged VAT which is refunded by HMRC would need to be fully repaid to customers) and would also be dependent on HMRC changing its current view of the position in light of the CMS case.
Practical implications/considerations for affected suppliers:
- Suppliers of electric vehicle charging should check their contracts with app providers to determine if they are supplying electricity directly to drivers (i.e. where the app provider is acting as commission agent similar to the situation described for CMS) or supplying electricity to the app provider (who acts as principal and makes onward supplies to the drivers).
- It will be important to ensure that in each case, any contractual terms and conditions fully reflect the economic and commercial reality of what is being supplied and to whom.
- In cases where suppliers are making supplies directly to drivers within the monthly usage limits and contracts and economic reality reflect this position, it may be prudent to consider if there is merit for submitting a VAT repayment claim to HMRC based on the findings in the CMS FTT case. Suppliers would also need to consider any potential impact on their future VAT accounting and overall budgeting, and financial positions should HMRC’s current view of the VAT treatment change following an unsuccessful appeal by HMRC of the FTT decision.
How we can help
If you would like further guidance on the above or if you would like to discuss in relation to your own business circumstances, please contact your usual UHY VAT adviser.
