A Cheaper Week at the Plug: Home Charging After the VAT Cut

Two changes reached the plug on 1 October, and a week on the picture is clearer. The first was the energy price cap, which sets the ceiling on standard home electricity for the quarter and which we covered on its first day in our price cap piece. The second was quieter and, for drivers with a driveway, worth more: value added tax (VAT) on household electricity in Great Britain fell from 5% to 0%.

The VAT cut

The zero rate is temporary, running from 1 October 2026 to 31 March 2027 for qualifying domestic electricity supplies in England, Scotland and Wales, per HMRC's published brief. Northern Ireland keeps its 5% reduced rate. The cut reaches electric car charging because a car plugged in at home draws from the household supply, so the electricity it uses is taxed at the same rate as the rest of the home. Public chargepoints are a different supply, and the VAT there is unchanged at 20%.

What the cap does to the same bill

Ofgem's unit rates for the new cap period put the average direct debit electricity rate at 26.32p per kWh, up from 26.11p last quarter, with the daily standing charge falling to 54.83p. The cap's own tables note that no VAT applies to electricity for the next six months, which means the published unit rate is closer to what a standard tariff driver actually pays than it has been for years. A car that covers 4.5 miles per kWh costs a shade under 6p per mile to charge at that average rate.

What suppliers are charging

Octopus Energy said it passed the cut on from day one, including to customers on fixed tariffs, as reported by Birmingham Live. Its EV tariff, Intelligent Octopus Go, prices smart charging at 6.6p per kWh on the EV Saver rate, and 7.7p per kWh for customers who hold the tariff but did not get their car through Octopus EV. That sits far below the capped average, and it is the rate that does most of the work in the household charging sum.

The per mile picture

Octopus's own figures, based on prices from 1 October 2026, put home charging as low as 2p per mile against 18p per mile for petrol, a 16p difference. Over a year of 8,000 miles, the company puts home charging at £148 against £1,411 for petrol, and a full charge of a typical electric car at £4.07 against £38.79 for the same distance in an equivalent petrol model. These are Octopus's numbers rather than an independent index, and they assume a driver who can charge at home on a favourable tariff, which is the group that gains most from the change.

The gap that remains

Public charging is where the cut stops. Rapid and ultra-rapid chargers keep their 20% VAT, and their prices are set by operators rather than by any cap. Zapmap's price index put the rapid and ultra-rapid weighted average at 77p per kWh in August against a typical home EV tariff of 8.6p, the two-tier divide we mapped in the public and home price gap. Alicia Hempsted, a car insurance expert at MoneySuperMarket, made the point plainly: "The six-month VAT cut on household electricity is welcome news for EV drivers who can charge their vehicles at home. However, public charging will continue to have 20% VAT applied."

Who benefits, and who does not

For drivers who charge at home the cut compounds an advantage they already had. The AA's latest readiness index puts home charging at 66% cheaper per mile than petrol, and the VAT change widens that further. The arithmetic is less kind to anyone without off-street parking, who pays the public rate and gets nothing from the change at all. We set out the workarounds, from on-street and lamppost charging to workplace bays, in our charging without a driveway guide.

What it adds up to

For a household that charges an electric car at home, the effect is straightforward: the same number of kilowatt hours costs 5% less than it did in September, and on an EV-specific tariff the rate was already far below the capped average. The bigger influence on the monthly figure is which tariff you are on, not which week it is. The gap between the cheapest overnight rate and the capped standard rate is close to 20p per kWh, several times the 5% the VAT change delivered, and anyone on a standard tariff with off-street parking and a smart meter has more to gain from moving to a time-of-use deal than from the tax cut itself. The VAT change makes a good tariff better; it does not make a bad one good.

The honest read

A six month tax holiday is welcome and it is finite. It ends on 31 March 2027, and nothing has been announced about what replaces it, so a fixed tariff signed now carries a small amount of policy risk into the spring. The price cap, by contrast, resets every quarter, with the next change due in late November. Together the two measures did most for the drivers who already had the easiest route to cheap charging, and left the harder cases broadly where they were. The cheapest mile in British motoring is cheaper again this week, and it is still available only to the households that can plug in overnight.