From 1 October, VAT has been removed from household electricity bills in Great Britain, with the rate falling from 5% to zero until 31 March 2027. The Government estimates the move will save a typical household around £45 a year. John Felgate, Managing Director of STIEBEL ELTRON UK, explains:
This is genuinely good news for households, and it couldn’t have come at a better time. Heat pumps have long been the greener choice for heating our homes, and now they’re becoming an even smarter one for people’s pockets too.
As the nights draw in and the heating goes on, the cost of running a heat pump will fall noticeably. Because heat pump homes rely on electricity for both heating and hot water, they stand to benefit more than most.
The cut also sends a really clear signal. By removing VAT from electricity but not from gas, the Government is tipping the balance firmly towards low-carbon, renewable heating. That makes the decision easier for anyone wondering whether a heat pump is right for their home.
Last year, renewables generated a record 52% of the UK’s electricity, the second year running they’ve provided more than half, and that share keeps growing as more clean power comes onto the grid. It’s right that what people pay for power should no longer be dictated by the price of gas.
This is exactly the kind of support households need, and we’d welcome it as a fixture of every winter, not just a one-off. Making it an annual measure would give families real confidence that choosing a heat pump will keep paying off, year after year.
Find out more at: Home – Stiebel Eltron UK
