Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what estimate her Department has made of the cost to the Exchequer of reducing the rate of VAT on domestic heating oil from 5 per cent to zero per cent.

HMRC does not hold information on the VAT revenue from domestic heating oil. This is because businesses are not required to provide a breakdown by product or service on their VAT returns, as this would impose an excessive administrative burden. Hence, we do not have figures for the cost to exchequer of reducing the VAT on domestic heating oil from the reduce rate of 5% to 0%.

HMRC has published estimates on the wider cost of the reduced rate of VAT on supplies of domestic fuel and power. This relief costs the exchequer £7 billion in the 2025 to 2026 tax year.