HMRC has updated its guidance on VAT Notice 708, confirming that electric vehicle charging points can be treated as building materials that are ordinarily incorporated into new dwellings.
This means that, where qualifying conditions are met, EV chargers supplied and installed as part of the construction of a new home may benefit from the zero rate of VAT.
The update is a welcome clarification for housebuilders, developers and contractors working on residential construction projects. As electric vehicles become more common and the demand for home charging infrastructure increases, the VAT treatment of EV charging points has become an important practical question for those pricing, procuring and delivering new homes.
VAT Notice 708 sets out how VAT applies to building work and materials supplied in connection with construction projects. In broad terms, the construction of a new dwelling can qualify for zero-rating, and certain materials incorporated into the building or its site may also fall within that treatment. HMRC’s latest updated adds EV charging points to the list of accepted items in the section covering dwellings.
This does not mean that all supplies connected with EV charging are automatically zero-rated. The relief applies where the charging point is supplied as part of qualifying construction work, such as the building of a new dwelling, and the wider conditions for zero-rating are satisfied. Standalone sales of charging equipment, replacement installations, public charging services and other non-qualifying works may still be subject to different VAT treatment.
For developers and contractors, the change is particularly relevant when agreeing contracts, preparing tenders and reviewing invoices. Applying the wrong VAT rate can create additional costs, cash flow issues or compliance risks, especially where projects involve a mix of residential, commercial or refurbishment works. Clear documentation will be important to demonstrate that the EV charger forms part of the qualifying construction of a new dwelling.
The update also reflects the growing expectation that new homes should be built with the infrastructure needed for a lower-carbon future. Including EV chargers within the scope of zero-rated qualifying construction costs may help remove uncertainty at the point of installation and support more consistent treatment across new residential developments.
Businesses should, however, take care not to assume that the same VAT treatment will apply in every circumstance. The correct position will depend on the nature of the property, the type of work being carried out, the contractual arrangements and whether the relevant conditions in VAT Notice 708 are met.
Hillier Hopkins works with developers, contractors and property businesses to navigate the VAT rules that apply to construction projects. If you are planning a residential development, reviewing existing contracts or uncertain how the rules apply to EV charging points, our VAT specialists can help you understand the correct treatment and reduce the risk of unexpected VAT costs.
