HMRC News: Energy VAT cut to give families breathing space

From 1 October 2026, VAT is removed from household electricity bills. The government says this will reduce the Ofgem energy price cap by around £45 a year, giving families some breathing space over the winter.

The cut is expected to benefit all households, including those on fixed tariffs, as suppliers are encouraged to pass the saving on to customers. The measure is part of a wider set of cost‑of‑living actions, including capped bus fares and cuts to business rates for pubs, social clubs and high‑street businesses.