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Burnham announces VAT cut on electricity bills starting in October.

12 sourcesFirst reported 12 hours agoUpdated 3 hours ago

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Prime Minister Andy Burnham announced plans to eliminate VAT on household electricity bills, starting October 1, 2026.
The move is intended to alleviate the financial burden on households amid ongoing cost-of-living challenges.
The government estimates that this VAT cut will save homes approximately £45 per year.
This initiative is projected to cost around £850 million for the period of 2026-27.
The funding for the tax cut will come from the cancellation of the Digital ID programme.

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On July 21, 2026, British Prime Minister Andy Burnham announced plans to eliminate the Value Added Tax (VAT) on domestic electricity bills, which is set to take effect on October 1. This move is part of Burnham's first significant action to address the ongoing cost-of-living crisis affecting households across the UK. The government anticipates that this cut will save households approximately £45 annually, and over the fiscal year, the measure is expected to cost the government around £850 million.

This decision comes on Burnham's second day in office, reflecting his administration's commitment to alleviating financial pressures faced by citizens. To fund this tax reduction, the government will cancel the previously planned Digital ID programme, projected to save £1.8 billion. The announcement has drawn attention as a pivotal beginning for Burnham's leadership and a response to public concerns regarding rising living costs.

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Burnham announces VAT cut on electricity bills starting in October.

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