A First-tier Tribunal ruling handed down in February 2026 has cracked open one of the more quietly expensive VAT anomalies in the UK fleet and property sectors: the 20% VAT rate charged on public electric vehicle charging. Charge My Street Limited v HMRC [2026] UKFTT 318 (TC) found that electricity supplied at public EV charge points can qualify for the 5% reduced rate — a 15-percentage-point gap that, applied retrospectively over four years, represents a material sum for any business that operates or hosts charge points. HMRC is appealing, but the decision is on the table and the window to file protective claims is open now.
If you run a fleet, own commercial property with charge points, operate hospitality or retail premises, or sit on the board of an EV infrastructure business, this case needs your attention before the end of the quarter.
What the Case Was Actually About
Charge My Street Ltd (CMS) is a community benefit society that installs and operates public EV charge points, primarily in locations where residents lack off-street parking — car parks, village halls, schools, pubs. The statutory question was narrow but consequential: does electricity supplied at a public charge point qualify for the 5% reduced VAT rate under Note 5(g) of Item 1, Group 1, Schedule 7A of the Value Added Tax Act 1994?
That provision reduces VAT to 5% on a supply of electricity to a person at any premises, provided the total supplied to that person at those premises does not exceed 1,000 kWh per month. HMRC’s longstanding position was that public charge points do not constitute “premises” for these purposes and that customers had no qualifying interest in the location. The FTT disagreed on both counts.
How the Tribunal Dismantled HMRC’s Position
The FTT identified three planks in HMRC’s argument and rejected each of them. First, HMRC argued that “premises” requires the recipient to have a proprietary interest — to own or occupy the location. The tribunal found no such requirement in the legislation. “Premises” carries its ordinary English meaning: a defined, identifiable place. A public car park qualifies.
Second, HMRC contended that the 1,000 kWh monthly threshold should be pro-rated for short-duration supplies — so that a single charge of, say, 50 kWh at a single session would be tested against a daily equivalent of roughly 33 kWh and would therefore fail the threshold. The FTT rejected this entirely. The statute says 1,000 kWh per month. A typical EV charge of 30–80 kWh comfortably falls within that limit.
Third, HMRC argued that public charge points cannot be premises because the supply is made at “various locations.” The FTT found this circular: each individual charge point is a discrete, identifiable location and the threshold analysis is applied per-location.
The result is significant. As Eversheds Sutherland noted in their analysis, the ruling “potentially opens the door to VAT recovery on a significant scale” for the sector. KPMG’s commentary flagged the decision as one of the most commercially significant VAT rulings for infrastructure operators in several years.
Where CMS Partially Lost — and Why It Matters for Structuring
The decision was not a clean sweep for the taxpayer. CMS partially lost on claims relating to supplies made through third-party app operators (3-PAOs). Where CMS’s contractual arrangements meant it was supplying electricity to the operator rather than directly to the driver, the FTT found the reduced rate could not apply — the supply was business-to-business, not the consumer-facing supply the legislation contemplates.
This is a direct lesson in contract structuring for any charging network using third-party platforms. If your commercial agreements mean the platform is the VAT principal and the driver is the platform’s customer — not yours — you lose the reduced-rate argument. Review your charging network contracts before you file a protective claim; the strength of that claim depends on the contractual chain.
Simmons & Simmons produced a detailed breakdown of the supply-chain analysis, noting that “the identity of the supplier in each transaction becomes critical — and many operators will need to audit their agreements urgently.”
HMRC’s Response: Brief 4 (2026) and the Appeal
HMRC issued Revenue & Customs Brief 4 (2026) on 12 May 2026. The message was unambiguous: HMRC is applying for permission to appeal to the Upper Tribunal. Their interim policy — standard 20% VAT applies — remains in force until the appeal is resolved.
This creates a classic VAT protective claim situation. You cannot rely on the FTT decision to reduce your output tax today. HMRC will reject claims that change the rate prospectively. But you can — and should — file a protective claim for the period going back four years, preserving your right to repayment if the Upper Tribunal upholds the FTT decision or if HMRC’s appeal fails.
The four-year time limit runs from the end of the VAT period in which the output tax was overpaid. For most businesses accounting on a quarterly basis, the oldest claimable period is now approaching mid-2022. Each quarter that passes without a protective claim narrows your recovery window.
The Numbers That Should Focus CFO Attention
The 15-percentage-point VAT differential is not trivial at scale. A company operating 100 charge points with average throughput of 500 kWh per point per month at 35p/kWh is generating roughly £17,500/month in electricity revenue per point — or £1.75 million across the estate. The VAT difference between 5% and 20% on that revenue is approximately £262,500 per month in output tax. Per year: over £3 million. Over four years, subject to the specific facts and contractual structure: material eight-figure exposure for larger operators.
For property companies and hospitality operators who host charge points but have outsourced operations, the analysis is more complex — but the contractual structure question is the same. If you are treated as the supplier of the electricity (rather than the charge point operator), you bear the output VAT exposure and hold the recovery opportunity.
Crowe UK and UHY Hacker Young have both published sector-specific analyses noting that businesses in retail, hospitality, local government, and commercial property with landlord-controlled charge points should all be reviewing their position.
The Broader Policy Picture: Net Zero, VAT, and Government Consistency
There is a legitimate policy incoherence here that goes beyond the legal dispute. Home EV charging already attracts 5% VAT — the reduced rate clearly applies where a domestic supply is made to a householder. Public charging at 20% creates a structural disadvantage for the estimated 40% of UK households without off-street parking who depend entirely on public infrastructure. The Travers Smith analysis frames this sharply: “The VAT treatment of EV charging is inconsistent with the government’s stated net zero objectives.” That argument is unlikely to succeed in the courts, but it may inform how quickly HMRC chooses to resolve the appeal — or whether Parliament legislates independently of the litigation.
The government’s June 2026 Tax Update included broader simplification measures and signals a continued focus on reducing administrative friction. Whether EV charging VAT is addressed in the 2027 Finance Bill or resolved through the Upper Tribunal first is an open question, but the direction of travel is clear: the current anomaly is not sustainable.
Six CFO Actions Before the End of Q3 2026
- Map your charge point exposure now. Identify every location where your organisation supplies or is deemed to supply electricity at public or semi-public charge points. Include retail forecourts, hotel car parks, workplace public-access chargers, and managed service stations.
- Audit your contractual chain. Determine whether you are the VAT principal in each supply relationship, or whether a third-party app operator or network provider is the principal. The answer determines whether you hold a recoverable claim or whether the claim belongs to the operator.
- Quantify the four-year recovery window. Work with your VAT adviser to estimate the output tax overpaid on qualifying supplies since mid-2022. The calculation requires supply data by location and per-customer usage — most smart charging systems will have this at meter level.
- File protective claims before Q3 2025 closes out. Any VAT period ending in or before June 2022 is now outside the four-year window. Submit protective claims to HMRC’s VAT Written Enquiries team, referencing Charge My Street Ltd v HMRC [2026] UKFTT 318 (TC). Claims should state they are submitted on a protective basis pending the Upper Tribunal appeal.
- Review supplier contracts for new installations. If you are procuring new EV charging infrastructure, structure contracts to ensure direct supply to the end user where possible. The 3-PAO structuring risk identified in the FTT decision is entirely manageable with appropriate drafting.
- Monitor the Upper Tribunal timeline. HMRC’s appeal permission has been sought but not yet granted as of the time of writing. A substantive Upper Tribunal hearing, if permission is granted, is unlikely before late 2026 or early 2027. The FTT decision stands in the interim; the protective claim strategy remains the correct approach.
What This Means for PE-Backed Infrastructure Businesses
For private equity sponsors and portfolio companies in the energy transition and mobility infrastructure space, the CMS decision is relevant both as a financial recovery opportunity and as a due diligence flag. Any EV charging business acquired in the last four years may hold an unrecognised VAT asset — or an unrecognised liability, depending on how the contractual structure sits. In sale processes, expect bidders to treat the protective claim value as contingent and to request warranty coverage on the supply structure analysis.
The Ross Martin analysis captures the vendor-side risk concisely: “Vendors who have not filed protective claims before exit may find they have left value on the table — or worse, left their buyer with an unquantified VAT risk that reappears in completion accounts.”
The Bottom Line
The First-tier Tribunal has found, clearly and with detailed reasoning, that public EV charging can qualify for the 5% reduced VAT rate. HMRC disagrees and is appealing. The standard rate remains in force. That does not mean you do nothing — it means you file protective claims now, before the rolling four-year window eliminates your oldest recoverable periods, and you restructure new supply contracts to maximise the position if and when the reduced rate is confirmed at Upper Tribunal or beyond.
The cost of filing a protective claim is a few hours of adviser time. The cost of not filing is potentially several years of irrecoverable output tax.
Need help assessing your EV charging VAT exposure or structuring a protective claim strategy? Mark Hendy at Tanous Limited advises PE-backed businesses, owner-managed companies, and infrastructure operators on VAT planning, tribunal decisions, and practical CFO compliance. Contact Mark directly to discuss your position.