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5% VAT to be removed from electricity bills from 1st October 2026
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Fiscal year from 1st of October so that's only 6 months
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Until the next budget in October any new spending commitments have to come from the agreed budget for this year. £45 is £45, pays my car MOT.
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It'll be less than that for me so far more than that for someone else who really needs it. Maybe it'll be shoes for the child etc.
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Not bad at all for those with storage heaters or heat pumps
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Will those on fixed rates see the same saving? I think they should, right? As the VAT is calculated after the cost of the electricity itself has been calculated.
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Of course they will. It's a government tax on the cost, absolutely nothing to do with the utility companies, they just collect it on behalf of the government.
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The official announcement is due on August 26, 2026, so not too long to wait now.
If the price cap goes up, then the saving for those still lingering on the price cap will go up too. (at least as far as it relates to electricity)
ML has long been advising those on the Pants Cap (as he refers to it) to get off it.
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It'll be a saving of 4.67% for all bill payers.
Maybe not a lot to some, but I welcome any level of saving, especially when it involves no time and effort from me to achieve. There's lots of discussions elsewhere on this money saving forum on measures people take (requiring time & effort my them) to save much less.
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Not worth it for me…….the bulk of our energy use is winter heating from gas boiler so that's where most of the VAT is.
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£45 could be an extra 3 packets of fags to some 😁
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