Temporarily zero rate VAT on energy

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Temporarily zero rate VAT on energy

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The Prime Minister has said he wants to legislate to ensure all energy suppliers put all customers on their cheapest tariff. This will have the effect of reducing competition and increasing the cheapest cost for those who do shop around for 'the best deal'. This, in the long run will be bad for consumers, push up prices and reduce choice.

The quickest way for the government to reduce energy bills would be to zero-rate energy for domestic consumers and businesses. This could be a temporary measure for a year or two while other options are explored to combat rising costs.

We call on the government to reduce VAT on energy to zero rate for a minimum of 12 months and for businesses to pay VAT on energy of either zero rate or 5%.

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