The electricity VAT cut is here: what it means for EV drivers
Oct 1, 2026
8 min read
When did a bill last go down on its own? Well, starting today, October 1st, 2026, Andy Burnham's electricity VAT cut officially kicks in. The government has temporarily removed VAT on household electricity in England, Scotland and Wales, down from 5%, and it stays there for the next six months.
Great news for EV drivers who can charge at home. That VAT cut includes the electricity you use to charge an electric car at home. If you already charge on your driveway, it's a welcome bonus. If you're still filling up with petrol or diesel, it's one more reason to look at what switching could save you.
The short version
- VAT on household electricity in Great Britain is now 0%, from 1st October 2026 to 31st March 2027. It was previously 5%.
- It covers charging an electric car at home, because your car charges from your household supply.
- It's electricity only. VAT on gas stays at 5%.
- There's nothing to claim, so you don't need to do anything to get it. Your energy provider should adjust the rate accordingly.
- This means drivers can charge at home for as little as 2p per mile, with an exclusive EV charging tariff from Octopus Energy, compared with 18p per mile for petrol.
What is the electricity VAT cut?
The electricity VAT cut is a temporary zero rate of VAT on household electricity in Great Britain. It runs from 1st October 2026 to 31 March 2027. Until today, we paid 5% VAT on home electricity. Now the VAT on your electricity bill has gone. It applies in England, Scotland and Wales. In Northern Ireland, household electricity will stay at 5%.
It's also electricity only. Gas isn't affected, so if you're on a dual fuel tariff, it's your electricity bill that loses its VAT, not your gas bill.
And it's temporary. Ofgem's price cap page puts it simply: there's no VAT on electricity from 1st October 2026 to 31st March 2027. The government says the cut saves households an average of £45 a year.
Does the VAT cut apply to charging an electric car at home?
Yes. When you charge an electric car at home, it runs off your household electricity supply, and that supply is now zero-rated for VAT. So the electricity going into your car on your driveway carries no VAT until 31st March 2027.
What if you're on a fixed tariff? Along with other suppliers, Octopus Energy has said it'll pass the cut on to its customers' rates from day one, even if they're on a fixed tariff. So despite the energy price cap increasing, Octopus Energy's Intelligent Octopus Go - EV Saver tariff, will cost just 6.6p per kWh for smart charging. This discounted rate is exclusive to Octopus EV drivers.
If you’re on Intelligent Octopus Go, but don’t get your car through Octopus EV (and miss out on the discounted EV Saver tariff), your smart charging rate is be 7.7p per kWh. If you’re with another energy supplier, check how they plan to adjust your pricing.
With Intelligent Octopus Go (and the EV Saver version of the tariff) you get up to 6 hours of off-peak smart charging every day for these cheaper rates. Plus, your entire home gets the same cheap rate overnight - and whenever your car is smart charging.
How much does it cost to charge an electric car at home now?
Charging at home was already far cheaper than filling up. A full charge at home can cost just £4.07 in a typical EV, compared with £38.79 for the same amount of miles in an equivalent petrol car.
Here's how home charging looks before and after the cut, next to petrol.
| What you're comparing | Charging at home | Petrol (August 2026) |
|---|---|---|
A full charge, or the same miles in petrol | £4.07 | £38.79 |
Per mile | 2p | 18p |
A year of driving | £148 | £1,411 |
Home charging figures are for an MG4 Premium Long Range charging on Octopus Energy's Intelligent Octopus Go - EV Saver tariff, exclusive to Octopus EV drivers. Petrol figures are for a VW Golf doing 45mpg. A year of driving is 8,000 miles. Full workings are on our per-mile explainer.
The VAT saving on a single charge is small, because home charging was already cheap. What really counts is where you compare home EV charging costs with the cost of petrol.
How much cheaper is charging at home than filling up with petrol?
Quite a lot. Based on 1st October 2026 prices, you can charge at home for as little as 2p per mile, with an exclusive EV charging tariff from Octopus Energy, compared with 18p per mile for petrol.
Over a year, that adds up. Charge at home for as little as £148 a year, compared with £1,411 for petrol. That's based on 8,000 miles a year, in the same two cars as the table above.
Drive more and the difference gets even bigger. Drive less and it shrinks, but home charging still comes out cheaper per mile. Want the full breakdown? Our charging costs guide has it.
Thinking of switching from petrol or diesel?
If you've got a driveway or other off-street parking, you're the person the electricity VAT cut helps most. Home charging is where the cheap miles are, and until the end of March there's no VAT on it.
Here's what you'll need to make the most of it:
- Somewhere to plug in. A driveway, garage or other off-street space at home.
- A home charger. Our guide to installing a charger covers what it costs and what's involved.
- A smart EV charging tariff. Your car charges overnight, when your smart charging rate kicks in.
Still not sure the sums stack up? Our running costs explainer looks at where else an electric car can save you money.
Do you need to do anything to get the VAT cut?
No. GOV.UK says you don't need to do anything to claim it. The zero rate applies to household electricity automatically from 1st October 2026. But it’s worth checking your next bill to make sure you see 0% VAT on your electricity. If you get gas too, that part stays at 5%. If anything on your bill doesn't look right, ask your energy supplier. If you’re with Octopus Energy, you can contact them on hello@octopus.energy.
Electricity VAT cut: common questions
Is VAT being removed from electricity bills?
Yes, for now. VAT on household electricity in England, Scotland and Wales is 0% from 1st October 2026 to 31st March 2027, down from 5%. It's a temporary zero rate and covers electricity only. In Northern Ireland, household electricity stays at 5% VAT.
Does the VAT cut apply to gas?
No. The cut covers electricity only, and VAT on household gas will stay at 5%. If you're on a dual fuel tariff, you'll see 0% VAT on the electricity side of your bill and 5% on the gas side. Charging an electric car at home runs on electricity, so it gets the full cut.
When does the electricity VAT cut end?
The zero rate runs until 31st March 2027. After that, it's set to go back to 5%, unless the government decides otherwise. Until then, the electricity you use at home in Great Britain, including what powers your car, carries no VAT.
Does the VAT cut apply to charging an electric car at home?
Yes. Your car charges from your household electricity supply, so that electricity has no VAT from 1st October 2026 to 31st March 2027. On Octopus Energy's Intelligent Octopus Go - EV Saver tariff, exclusive to Octopus EV drivers, home charging will stay low, despite overall energy costs rising.
Do I need to do anything to get the VAT cut?
No. GOV.UK says you don't need to do anything to claim it. If you don't have a smart meter, send your supplier a reading on or around 1st October. That way, a bill covering both months splits the two VAT rates accurately. Then check your next bill shows 0% VAT on electricity.
How much will the electricity VAT cut save me?
The government puts the average saving at £45 a year per household. What you save depends on how much electricity you use, so the more you use, the more it's worth. Charging an electric car at home adds to your usage, though on a cheaper rate the VAT on it was already small.
Will VAT on public EV charging be reduced too?
No, the VAT on public EV charging will stay at 20%.