Britain’s new PM orders cut in VAT on electricity

Wednesday, 22 July 2026 07:19 - - {{hitsCtrl.values.hits}}

UK Prime Minister Andy Burnham

UK’s new Prime Minister Andy Burnham has ordered removing value added tax (VAT) on electricity bills in a bid to bring down the cost of living.

The reduction from 5% VAT to zero will come into effect on 1 October, saving a typical UK household about

£ 45 a year.

Suppliers have been told the VAT reduction should be passed on to all household customers, including those on fixed tariffs, as was the case when some charges were taken off bills in April.

The cut will take effect in England, Scotland and Wales, but equivalent funding would be given to Northern Ireland, which is regulated differently, the UK Government said.