5% VAT to be removed from electricity bills from 1st October 2026

Scot_39

AFAIK yes at one stage energy was zero VAT rated - but it pretty much isn't - or wasn't - in other EU nations.

I think it was in the 90's following the big economic hit of the ERM crisis.

For recent years it has been set at the EU's 5% number

(although exemptions were awarded to some states at least as part of Ukraine crisis)

In fact in others it is or was much higher - often 20/21% - in others like Sweden 25% and in Hungary 27%.

See p12 - here - I am sure there are current versions - but google still claims the above 25/27 numbers are still good.

https://taxation-customs.ec.europa.eu/system/files/2021-06/vat_rates_en.pdf

TroubledTarts

I estimate I will save 5% 🤣 (electricity only)

debitcardmayhem

https://forums.moneysavingexpert.com/discussion/comment/82076833#Comment_82076833

Get a new calculator, you will save 4.76% 😘

TroubledTarts

https://forums.moneysavingexpert.com/discussion/comment/82076857#Comment_82076857

I have included a few Gregg's coffees in my calculation 😅🤣

Daycart1

If it's a £45 per year saving but only runs for six months ending in March surely it's only a saving of £22.50 ?

RelievedSheff

https://forums.moneysavingexpert.com/discussion/comment/82076426#Comment_82076426

It doesn't even buy a pint in our local!!

prowla

https://forums.moneysavingexpert.com/discussion/comment/82076753#Comment_82076753

The product is gas/electricity; the value added is supplying it to your house.

Whether essentials should be VAT-exempt is another question.

Water is a fundamental essential to life itself, whereas arguably electricity and gas aren't (as evidenced by the fact that people can live off-grid).

Sea_Shell

https://forums.moneysavingexpert.com/discussion/comment/82076950#Comment_82076950

Also, the headline saving is no doubt again for an "average user" on the price cap. Which hasn't been announced yet for October, so how do they know!!

Done my own sums, based on historic usage for those 6 months, and as a low user I will save about £8 off the unit price, and £4 off the standing charge element, so £12 overall, over the 6 months.

What to spend the £2 a month on….

pseudodox

@Sea_Shell

Same saving here. "£45 saving" is typical headline spin. Shall we meet up once a month for a bus ride? But it would have to be before 9:30am as my free bus pass kicks in then.

Walter_R

My electic bill includes VAT on the standing charge so probably that will be reduced too, or better still scap the standing charge!