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Millions of households across the UK will see lower electricity bills this winter, after the government announced that it will remove VAT from domestic electricity bills.
The government has announced that VAT on household electricity bills will be reduced from 5% to zero, from 1 October 2026, helping everyone with domestic energy costs during the colder months. The change should save the typical household around £45 a year.
Energy suppliers will be expected to pass the reduction on to all customers through lower bills. The change will apply, no matter what kind of tariff you’re on, or who your supplier is.
What happens next?
The VAT reduction will take effect from 1 October 2026 and should be reflected in your electricity bills from this date. The reduction will stay effect until the end of March next year.
Looking for more ways to save energy and cut your bills?
While this change will provide some short-term relief, there are lots of other ways to save energy and keep your bills down over the longer term. Help us help you:
