VAT Removal on Domestic Energy Bills

The Government’s drive towards electricity was emphasised by removing VAT from domestic energy bills from 1st October 2026 for 6 months

This has generally been well received and can only help those that are struggling with their finances. It is certainly a boost to those more susceptible to increased heating bills once the weather changes and heating becomes paramount for physical wellbeing and mental health.

So, what does this mean in monetary terms?

Abolishing VAT on all domestic electricity bill equates to roughly a £45 saving over 6 months. This includes the 60% of customers on a price cap living in England, Scotland and Wales. It is important to acknowledge the expected increases to the price cap on 1st October and subsequently 3 months later. It is anticipated that there will be a rise of 3.1% on gas and electric bills on 1st October. This will mean an approximate increase of £25 over 6 months The next price cap in 3 months will also see an approximate increase of 2% in January. This will essentially mitigate the removal of VAT.

However, it is encouraging that the incoming Government recognise that electricity is expensive compared to gas. The Government policy of taking us into an era of electricity continues as we move towards Net Zero.

If you require advice on energy matters contact us on 03306061488 or visit https://www.chil.uk.com/contact-us for more information