Home›Global Markets›Trade & Tariffs›UK to cut VAT on electricity bills by an average of £4…

UK to cut VAT on electricity bills by an average of £45 a year

The government says the VAT reduction from October will be funded by scrapping a digital ID scheme, though a senior official questioned whether that project is unfunded.

Reported · Written up by our desk · Trade & Tariffs

Britain’s new prime minister, Andy Burnham, said the government will remove VAT from electricity bills, cutting costs for households by an average of £45 a year starting in October, in what he described as an immediate measure to ease cost of living pressure.

The VAT cut is expected to be financed, according to officials, by Burnham’s decision to cancel the digital ID scheme, as the government looks to put “more money in people’s pockets.”

However, Darren Jones, who was sacked as chief secretary to the prime minister in Burnham’s reshuffle, raised doubts about the funding almost immediately, saying the digital ID project was unfunded and asking how the VAT cut would be paid for ahead of the budget.

Burnham, who became prime minister on Monday after pledging to give voters “some breathing space” on living costs, has framed the move as part of a broader package that he says aims to lower taxes on energy bills.

More like this

Sources