The Government charges 5% VAT on domestic energy. As energy prices have increased dramatically this year, the Government would likely profit from increased VAT takings while people find it harder to pay for their basic needs. We think that is wrong and the VAT should be cut to reduce energy bills.
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For the around 15 million customers on standard variable tariffs subject to the energy price cap, the October 2021 increase to the cap could mean £100 million extra collected in VAT (assuming typical usage).
There would be even more VAT collected from people who are forced onto more expensive tariffs, for example when they come to the end of a fixed rate or if their supplier stops trading.
As we have left the EU we are now free to set our own VAT policy and this cut would help everybody.