Millions of households will benefit from VAT being removed from domestic electricity bills from 1 October, cutting around £45 a year and giving families breathing space on the cost of living this winter.
The Prime Minister announced the move as one of his first decisions in office, following his commitment on the steps of Downing Street to take immediate action to help working people with rising bills.
Removing the 5% VAT charge on domestic electricity is expected to reduce pressure on the next Ofgem price cap. Government said the measure would apply from 1 October in time to affect bills this financial year.
Fuel poverty campaigners welcomed the decision. National Energy Action described it as “the start we wanted to see” as families continue to face pressure from high energy costs.
Labour MPs across the country have highlighted the change in local terms. Connor Naismith MP, among others, has welcomed the cut for constituents in Crewe and Nantwich.
Government said further decisions on longer-term support would be taken at the Budget alongside Office for Budget Responsibility forecasts, with all measures remaining consistent with fiscal rules.
