Government stops VAT on household electricity bills in cost-of-living crisis

The temporary tax cut will reduce VAT on household electricity from 5% to 0% for the current financial year. Economic impactMinisters believe the VAT reduction from electricity bills will not only help households but also have a positive effect on inflation. Small businesses that qualify for domestic energy VAT relief and are not registered for VAT are expected to receive the same reduction. Cutting electricity bill costs: Northern Ireland arrangementsBecause Northern Ireland continues to follow EU VAT rules on goods, including electricity, the tax cut cannot be applied automatically there. Because Northern Ireland follows EU VAT rules on goods including electricity, the tax cut cannot be applied there in the same way.