The United Kingdom has announced that domestic electricity bills will be zero-rated from 1 October 2026, reducing the VAT rate from 5% to 0%. The measure is temporary, applying until 31 March 2027, and will be funded by cancelling the planned Digital ID programme.
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The Independent · about 12 hours ago
The UK government will remove VAT from domestic electricity bills from 1 October 2026, cutting the rate from 5% to 0%. The change is expected to save households around £45 a year and will be funded by cancelling the Digital ID programme.
The Independent · about 14 hours ago
In the UK, the government announced an £850 million tax cut on energy bills, making electricity bills VAT free from 1 October 2026 in England, Scotland and Wales. Northern Ireland remains exempt because EU VAT rates apply under the Windsor Framework, preventing the cut from applying there.
BBC · about 19 hours ago
UK VAT will be cut from household electricity bills from 1 October, reducing the rate from 5% to zero and saving households about £45 a year. The cut is funded by savings from scrapping the digital ID programme and will apply to England, Scotland and Wales, with equivalent funding for Northern Ireland.
The Independent · about 19 hours ago
UK households will see 5% VAT removed from electricity bills from 1 October 2026, a move announced by Prime Minister Andy Burnham. The change is expected to save about £45 on a typical annual bill, though a projected 3.1% rise in the price cap may offset the benefit.
Yahoo News Canada · about 23 hours ago
The United Kingdom will see VAT on household electricity removed from 5% to 0% on 1 October, saving typical homes around £45 a year.
Law360 · about 23 hours ago
UK court rules that Staffing Co cannot recover input VAT because its director knew or should have known its supply chain was compromised by fraud. The decision underscores the importance of due diligence in supply chain management for VAT recovery.
Key Takeaways
From 1 October 2026, the UK government will zero-rate domestic electricity bills, reducing the VAT rate from 5% to 0%.
The zero-rate will apply until 31 March 2027, the end of the 2026-27 financial year, after which it may be reviewed at the Autumn Budget.
The UK will fund the measure by cancelling the planned £1.8 billion Digital ID programme, with an estimated cost of £850 million in 2026-27.
Small businesses, charities and residential care homes eligible for domestic energy VAT relief will also receive lower electricity costs under the UK zero-rate from 1 October 2026.
Primary source
Read the full article at VatCalcThis summary was published on VATfaqs.com on 22 July 2026. It relates to VAT developments in United Kingdom. The original source is VatCalc.
