VAT savings will be negligible - get real Andy !!

merchcon55

I was curious as to how long the removal of VAT will be for - as well as if it applied to the standing charge as well.

It is a 6 month (1 Oct 26 to 31 March 27) VAT reduction and yes, it includes the standing charge.

Using as an example someone who uses 250 kwH of electricity per month (so 1500kwH for the 6 month period) and using 182 days, based on my unit and daily charges, I calculate:

1500 kwH x 1.3p savings = £15.45

182 days x 1.99p savings = £ 3.62

TOTAL SAVINGS: £19.07

Thank you PM Andy for the £19 - a couple of fish and chip meals.

And this is really suppose to help families???

MSE_James

Please could we gently ask that this thread steers away from the political aspect, otherwise it will likely have to be removed.

MyRealNameToo

https://forums.moneysavingexpert.com/discussion/6682963/vat-savings-will-be-negligible-get-real-andy

Supply and Standing Charges are not seperate items at present from a VAT perspective so the change is from both.

There is still vat, its just 0%, but there a significant legal differences between 0% rated and Exempt goods/services. Seems petty but as someone working in an exempt service its a material difference. The change will last until someone sees fit to change it to something else, the change wasnt defined as a fixed period such that it automatically reverts to something else at a later date.

oldernonethewiser

If you don't need the saving feel free to donate it to charity.

nottsphil

*supposed

I guess there'll always be people who demand a foot when given an inch.

Altior

I guess there'll always be people portraying themselves as giving a foot, when it's really an inch. Maybe thinking more about the headlines, than the substance. I believe it was portrayed as a tax cut. It technically is, I suppose 🙂

molerat

https://forums.moneysavingexpert.com/discussion/comment/82133381#Comment_82133381

It is not so much a "tax cut", it is just reducing the additional taxation revenue that has been moved to energy bills.

subjecttocontract

So, I'm gonna be about £20 better off. Thats a totally insignificant amount. On par with the Christmas bonus paid to pensioners and won't excite many people. However, if the plan is to choose to tweak/reduce other taxes over the next few months then the total savings might get me interested.

tfhnota

Those on fixes will see a small decrease whilst those on variable it will be absorbed by increased rates so it will be there but won't be recognised as such.

Altior

https://forums.moneysavingexpert.com/discussion/comment/82133386#Comment_82133386

Trying to dance around the politics (which is pretty much unavoidable for this topic), it allows him to claim that it's a tax cut at the despatch box.

On the wider policy point, in my view the argument for domestic energy to be zero rated is compelling. Potentially could have a marginal rate based on use, however that is pretty difficult to draw the line, with such varied weather and health requirements.

Xbigman

https://forums.moneysavingexpert.com/discussion/comment/82133413#Comment_82133413

Well said.

To double down on it. If you have an all electric home with day rate electric heating spending £3000 a year then you're spending over £2000 of that during the VAT cut period, you'll be saving over £100. A saving worth having. Those of us that are low users (my estimated saving is £12) should stop moaning about it as we already have low bills. And some homes have bills way over £3k. This is one of the few government policies that actually gives the most benefit to those that need it.

Darren