A First-tier Tribunal decision handed down in March 2026 has the potential to reshape VAT accounting for every business operating, managing, or reimbursing public electric vehicle charging in the UK. Charge My Street Ltd v HMRC [2026] UKFTT 00318 (TC) ruled that electricity supplied at public charge points can, in principle, attract the reduced 5% VAT rate rather than the standard 20% HMRC has long demanded. For CFOs managing EV fleet programmes, workplace charging infrastructure, or employee expense policies that include public charging, this case has an immediate, quantifiable cash impact — and a four-year window to recover overpaid VAT.
The Case in Plain English
Charge My Street Limited (CMS) installs and operates community-based EV charge points across the UK, predominantly in residential areas where drivers cannot charge at home. CMS originally accounted for VAT at 20% on electricity sales — in line with HMRC’s longstanding VAT Notice 701/19, which explicitly listed public EV charging as a standard-rated supply. CMS then changed tack, submitted a claim for overpaid VAT, and argued its supplies qualified for the 5% domestic rate under Note 5(g) to Group 1, Schedule 7A of the Value Added Tax Act 1994.
The legal hook is Note 5(g), which reduces VAT to 5% on “a supply of electricity to a person at any premises where the electricity… was not provided at a rate exceeding 1,000 kilowatt hours a month.” That 1,000 kWh monthly de minimis threshold — the same rule that makes your domestic electricity bill subject to 5% not 20% — is the crux. CMS argued public charge points fall below that threshold at each individual location. HMRC said no, for four reasons. The tribunal disagreed with HMRC on all four.
How HMRC Lost on Every Major Point
HMRC’s defence rested on four arguments, each of which the tribunal dismantled in turn:
1. “These are not premises.” HMRC argued “premises” in the legislation means a building. The FTT rejected this: an identifiable defined area — such as a marked charging bay in a car park — qualifies. No building required. No ownership or legal interest in the location required. A charging bay is as much “premises” as a domestic garage.
2. “The electricity is not supplied to a person at their premises.” HMRC read the phrase “to a person at any premises” as meaning the person must have some proprietary connection to the location. The FTT disagreed: the test is simply that the person is capable of receiving the supply at an identifiable location. The driver pulling up to a charge point satisfies that test without needing to own, lease, or control the site.
3. “The 1,000 kWh threshold must be pro-rated daily for short-term sessions.” Under longstanding HMRC internal guidance, a supply lasting less than a month should be pro-rated at roughly 33 kWh per day — meaning a typical EV fast-charging session would theoretically exceed the threshold on a per-session basis. CMS pointed out this was absurd: boiling an electric kettle would breach the threshold at that rate. The FTT agreed with CMS: the 1,000 kWh limit is assessed over a full calendar month at each location, not per session.
4. “Some supplies are to third-party app operators, not drivers.” This is the one area where HMRC achieved a partial win. CMS used multiple payment channels — direct QR code, contactless, its own Fuuse app, and third-party apps. Where drivers paid CMS directly, the supply ran directly to the driver: 5% applies. Where third-party app operators acted as principals (buying electricity from CMS and reselling to drivers), the supply ran to the app operator — likely breaching the 1,000 kWh threshold in aggregate and attracting 20%. The FTT left the precise allocation between CMS and HMRC to determine. But the principle is clear: contractual structure determines VAT rate, and sloppily drafted agreements can cost you the benefit you’re entitled to.
Why This Case Matters to CFOs Beyond the Charging Industry
You don’t need to be a charge point operator to care about this ruling. Consider how many of the following apply to your business:
- Company EV fleet with drivers who charge publicly — employee expense claims will include VAT at 20% on public charging receipts. If the tribunal’s logic holds, the correct rate is 5%. That is a recoverable difference.
- Workplace charging infrastructure — if your business installs charging points and charges employees (or visitors) for electricity, you may be applying 20% VAT on supplies that are properly 5%. That is an overpayment and a potential error correction opportunity.
- Benefits-in-kind and P11D reporting — the VAT rate on a benefit affects its grossed-up cost. Getting the rate wrong creates downstream payroll and P11D errors.
- Capital project decisions — if you are weighing workplace charging investment, the VAT model has just shifted. Internal financial models based on 20% output VAT need revising.
- Supplier contracts — if you pay a charge network operator for employee charging on account, the VAT charged to you should now be scrutinised. Are you being overcharged?
Eversheds Sutherland notes that the decision has significant implications for EV businesses and investors beyond just CPOs — any entity in the EV charging value chain needs to revisit its VAT position.
The Error Correction Window: Four Years, Starting Now
Under HMRC’s VAT error correction regime (Notice 700/45), businesses can correct underclaims or overclaims going back four years from the current VAT period. For any business that has been paying 20% on qualifying public EV charging supplies since 2022, there is a recoverable sum sitting in HMRC’s account.
The process requires filing an error correction notification — not amending a return — for net errors above £10,000. Smaller errors can be corrected on your next VAT return. However, there are two complications to factor in:
- Unjust enrichment defence: If you collected 20% VAT from customers and cannot refund them the difference, HMRC can refuse repayment on the grounds that repaying you would leave you better off at customers’ expense. CPOs face this directly. For employers handling employee expenses, this is less of an issue — you are the end consumer absorbing the VAT cost.
- Appeal risk: HMRC has not yet indicated whether it will appeal to the Upper Tribunal. Claims submitted now are protected claims — they establish your position — but they may sit pending an appeal outcome. File now, expect HMRC to sit on them.
Ross Martin’s analysis reinforces that submitting protective claims promptly is the right move regardless of the appeal risk. Time limits are absolute. Waiting for legal certainty before filing means you lose the earliest periods of the four-year window.
The Contract Structure Problem: A Warning Shot for Every CFO
The most underreported aspect of this case is how CMS’s own contractual arrangements worked against it. Where third-party app operators were structured as principals rather than agents — buying electricity from CMS and reselling to drivers — the supply chain broke. CMS was supplying to the app operator (at volume exceeding the threshold), not to the individual driver (comfortably within it). The 5% rate was lost precisely because the contracts had not been drafted with VAT consequences in mind.
This is a recurring theme in VAT disputes. BKL’s commentary is direct: CPOs and third-party app operators should review their agreements and user terms now. The FTT accepted that in the Fuuse app situation, the contract did not reflect commercial reality and corrected for it. HMRC will not always agree to that analysis, and you should not rely on a tribunal to fix bad drafting.
For CFOs procuring managed EV charging services, the lesson is identical. Before you renew a charging network contract, understand whether your supplier is selling you electricity as principal or acting as your agent. The answer determines both the VAT rate and who bears the input tax. The technical legislative basis at Note 5(g) of Schedule 7A VATA 1994 is now settled in your favour — but only if the contractual structure supports it.
What HMRC Does Next
HMRC has three options: accept the ruling and revise VAT Notice 701/19, appeal to the Upper Tribunal, or issue a Revenue and Customs Brief setting out a modified policy pending appeal. As of the date of this post, HMRC has not published a response. That silence is itself informative — HMRC typically moves quickly when it disagrees. The absence of an appeal announcement suggests the department is still evaluating its position, possibly negotiating internally on the fiscal cost of conceding the point across the entire EV charging market.
The fiscal exposure is not trivial. The UK public charging market handled an estimated £800 million of EV charging revenue in 2025. A swing from 20% to 5% VAT on qualifying supplies — even a fraction of that total — is a nine-figure revenue impact for HMRC. Expect resistance, even if the legal position is ultimately settled in taxpayers’ favour.
CFO Action Points
- Audit your EV charging spend for the last four years. Identify all public charging costs where VAT was charged at 20% — fleet fuel cards, employee expense claims, managed charge network accounts. Quantify the overclaimed VAT.
- Review workplace charging arrangements. If you supply electricity to employees or visitors at company-installed charge points, check whether you have been applying 20% VAT and whether the 1,000 kWh threshold is met at each location. Most individual workplace bays will comfortably clear the test.
- File protective error correction notifications now. Do not wait for an HMRC appeal. Submit your claim under the four-year time limit. Expect HMRC to hold claims pending appeal, but your position is protected from the date of submission.
- Review your charging network contracts. Understand the legal structure: are you the end-purchaser, or is there an intermediary acting as principal? If intermediaries are involved, check whether the VAT on invoices issued to you correctly reflects the supply chain.
- Check your P11D process. If company EV charging has been grossed up using a 20% VAT assumption, recalculate. Error in rate = error in benefit value = potential penalty exposure on a self-assessment.
- Monitor HMRC’s response. Watch for updates to VAT Notice 701/19 and any Revenue and Customs Brief. If HMRC revises its published guidance, that signals the concession is made and claims can be progressed without waiting for further litigation.
The Broader Signal: HMRC’s Guidance Is Not the Law
Charge My Street is a useful reminder that HMRC’s published guidance — VAT notices, manuals, briefs — reflects HMRC’s interpretation of the law, not the law itself. Charge My Street has been paying 20% for years based on VAT Notice 701/19. It took a tribunal to establish that the notice was wrong. The same dynamic exists across dozens of VAT categories where HMRC’s published position has never been formally tested. As a CFO, when you are applying a VAT rate because “that’s what the HMRC notice says,” the right follow-up question is: has anyone ever taken HMRC to tribunal on this point and won? Sometimes the answer is yes, and the notice has simply never been updated.
In the EV charging space specifically, the structural VAT inequality between domestic (5%) and public (20%) charging has been a live policy complaint for years — from consumer groups, from charge point operators, and from the government’s own EV taskforce. This tribunal has not resolved that policy debate; it has simply confirmed that under existing law, properly structured public charging supplies are already entitled to the 5% rate. That is a meaningful distinction. You do not need Parliament to act. You need to structure your arrangements correctly and file the right claim.