Newly appointed UK Prime Minister Andy Burnham has announced that VAT will be removed from household electricity bills from October 1, delivering one of his first major cost-of-living measures since taking office.
The government said the 5% VAT on domestic electricity bills will be cut to zero, saving the average household around £45 a year. Ministers said the tax cut will be funded by scrapping the previous government’s £1.8 billion Digital ID programme.
Burnham said the move is aimed at easing pressure on families struggling with rising living costs and reducing inflation ahead of winter. Chancellor John Healey described the measure as immediate financial relief for households across the UK, with energy suppliers expected to pass the savings on to customers from October.