Chancellor John Healey has announced that the VAT cut on electricity bills will be extended until July 2027.
In his Autumn Budget speech today he claimed the removal of tax will take £50 off the annual price cap.
The government say this will be paid for by increasing the Bank Corporation Tax Surcharge from 3% to 6% for 15 months, before ending on 31st March 2028.
When referring back to his earlier announcement of the abolishment of the gas bill standing charge, Mr Healey said Labour will set out “similar reforms” for electricity bills.
These reforms stretch to businesses too, as 10,000 eligible firms in electricity intensive Industry Strategy sectors will be supported by the British Industrial Competitiveness Scheme, cutting electricity bills by up to 25%.
The government say this move is the “most significant intervention in business energy costs in a generation” with the change taking action in April 2027.
The electricity bill announcements are a part of what the Chancellor describes as “radical changes” that the country needs on energy.
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