Motoring experts have slammed HM Revenue and Customs for pledging to mount a legal challenge against rules that would see costs drop for millions of drivers.
HMRC has confirmed that it will appeal against a ruling from the First-Tier Tribunal, which stated that public electric vehicle charging should benefit from a reduced five per cent rate.
At present, public EV chargers attract a VAT rate of 20 per cent, while home chargers are levied at just five per cent.
There have long been calls for the VAT rate on public chargers to be cut to match home chargers, in a move that would equalise costs paid by those who cannot charge their EVs at home.
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A ruling on a case brought forward by Charge My Street suggested that the VAT disparity would be addressed, allowing all motorists to benefit from low charging costs regardless of where they charge.
However, HMRC has now stated its intention to appeal the case and challenge the calls for VAT to be equalised.
A spokesperson for HMRC said: "We're appealing this case, as our position is that standard rate VAT applies to electricity supplied through public EV charging infrastructure."
The move has sparked strong condemnation from the electric car industry, with many arguing that this could slow down the transition away from petrol and diesel vehicles.
HMRC will appeal against a ruling that could lead to VAT rates on public EV chargers being cut
|GETTY
John Lewis, CEO of char.gy, described HMRC's reaction to the case as "deeply disappointing", noting that it sends "entirely the wrong signal" to millions of drivers at a critical point in the transition.
He said: "The Government talks about accelerating EV adoption, yet is actively choosing to maintain a tax structure that makes public charging more expensive than it needs to be and undermines the transition.
"char.gy stands ready to pass on any VAT saving to our customers the moment the Government does the right thing. The question is: what is the Government waiting for?"
Data from Zapmap shows that there are 119,080 public electric vehicle chargers across the UK, with 759 being added last month.
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Experts have slammed the HMRC's decision to appeal the VAT tribunal ruling
| GETTYWhile there is no formal target from the Government, many are hopeful that the UK's public charging network will hit 300,000 by the end of the decade to support millions of drivers switching to EVs.
Labour has recently taken steps to accelerate the installation of EV chargers, including providing hundreds of millions of pounds in funding, as well as cutting red tape for charge point operators.
Tanya Sinclair, CEO of Electric Vehicles UK, accused the Government of defending the inequality for those who rely on public chargers for their EVs by appealing the decision.
"If you're serious about EV adoption, you don't fight the ruling that would fix your most regressive charging cost. You let it stand. Their actions don't match the narrative," she said.
There are almost 120,000 public EV chargers around the UK
| GETTYThis was echoed by Electrifying.com CEO, Ginny Buckley, who said the Government was "doubling down on a system that penalises millions of drivers who rely on public charging".
She highlighted that drivers who predominantly use public chargers can end up paying up to 10 times more than those who can charge at home, adding that this can make EVs more expensive to run than petrol cars in some cases.
Warren Philips, campaign lead at FairCharge, said HMRC's decision to appeal would directly impact more than a million drivers at present, and more than 30 million motorists who will switch over the next 10 to 15 years.
"FairCharge has led on this issue, but consumers, industry and MPs alike have always known it was wrong. Charging people more because they depend on public infrastructure was wrong in principle, and the tribunal confirmed it," Mr Philips concluded.