Government update: Energy VAT changes and a new Chancellor

The government has announced two notable developments that could influence the UK’s financial and tax landscape in the months ahead.

VAT removed from domestic electricity bills

From 1st October 2026, VAT will no longer be charged on domestic electricity bills, reducing the rate from 5% to 0%.

The change means households will no longer pay VAT on their domestic electricity bills from October. While this is expected to reduce electricity costs for consumers, it does not change the existing VAT treatment for most businesses, which will continue to follow the current VAT rules.

Although there is little direct impact for business owners, the announcement is another example of how tax policy continues to evolve. We will continue to monitor any future changes that may affect businesses and individuals.

New Chancellor appointed

The UK also has a new Chancellor of the Exchequer, with John Healey MP taking on responsibility for the nation’s economic and fiscal strategy.

A change in Chancellor often marks the beginning of a new phase in economic leadership, although no new tax measures have been announced as part of the appointment. Businesses and individuals are therefore likely to be watching closely for future fiscal statements and any changes to tax policy or government spending.

Keeping you informed

Changes to tax policy and government priorities can have implications for businesses and individuals alike. At Verallo, we’ll continue to monitor key announcements and provide clear, practical guidance on any developments that could affect your finances.

If you have any questions about current tax rules or would like advice on planning for future changes, our team is always happy to help. Get in touch today.