NAPIT has warned that the Government’s proposed pay-per-mile tax for electric vehicles could have a knock-on effect on electricians and contractors working in the EV charging market.
The organisation, which represents more than 20,000 electrical professionals through its certification and training work, has responded to the Treasury’s consultation on a new electric vehicle excise duty (eVED), arguing that the policy risks slowing EV uptake at a time when many installers have upskilled to meet growing demand for charge points.
Under the proposal, EV drivers would be charged 3p per mile from April 2028. The Government says the measure is intended to replace fuel duty income as more motorists move away from petrol and diesel vehicles.
For charger installers, the issue is less about the principle of replacing tax revenue and more about what the policy could do to demand. If motorists begin to see EVs as less financially attractive, it could affect the pace of home charger installations and weaken confidence in further expansion of charging infrastructure.
The Government’s position is that petrol and diesel drivers already pay tax based on how much they drive through fuel duty, while EV drivers currently do not make an equivalent contribution. By 2030, it expects around one in five drivers to pay no fuel duty at all, while other motorists continue to contribute an average of £480 a year.
Although fuel duty is not ring-fenced for road maintenance, the Government argues that all vehicles contribute to congestion and road wear, and that the current tax balance will become harder to justify as EV adoption increases.
NAPIT said it has raised concerns about the timing and fairness of the proposal, as well as its potential impact on the wider low-carbon transition.
Stephen Melton, NAPIT Director of Commercial and Compliance, noted, “While it is understandable that the Government will need to look at replacing income lost through reduced fuel duty revenue as more motorists switch to electric vehicles, we have questions about the timing and fairness of the current proposals.
“NAPIT is a certification body and training provider with over 20,000 members in the electrical industry, including a large number taking advantage of the growth opportunities provided by the transition away from fossil fuels towards low carbon heating and transport.
“Installing electric vehicle charging points is a growing area of business for our members, but we have concerns that future growth could be negatively impacted as consumers decide any potential savings from driving an EV will be impacted by extra taxes on EVs.”
If the economics of EV ownership become less compelling for households, the impact is likely to be felt first in the charging market, where customer decisions are often driven by payback, running costs and long-term savings.
NAPIT also pointed to Office for Budget Responsibility estimates suggesting eVED could raise as much as £1.4 billion a year by 2029-30. At the same time, it said the OBR estimates there could be 440,000 fewer EVs sold by the end of 2031 than would otherwise have been the case, as some buyers are deterred by the additional charge.
For installers, that is the key tension in the consultation: a policy designed to future-proof Treasury revenues could also reduce the pace of vehicle electrification, which in turn affects demand for charging infrastructure and the tradespeople delivering it.
NAPIT has also highlighted that EV drivers already pay other taxes, including VED, plus VAT on charging electricity. Charging at home attracts 5% VAT, while charging away from home is subject to 20% VAT.
Melton added, “The introduction of eVED sends a confusing message at a critical moment in the EV transition, risks reducing EV uptake, weakening the investment case for expanding the rapid-charging network and having a negative impact on electricians installing home charging points.
“Many of our members are sole traders or small businesses and some have made the switch to using electric vans to carry out their work so will also be impacted with additional costs as they travel to carry out work in homes and businesses across the country.”
That final point is likely to resonate across the trade. Many installers are not only fitting charge points but are also electrifying their own vans, meaning they could be affected on both sides of the transition: through reduced customer demand and higher operating costs.
The Treasury consultation remains open until March 18, and NAPIT is encouraging EV drivers and charge point installers to submit responses.
