Rishi Sunak is reportedly considering cutting the 5 per cent rate of VAT on energy bills in a bid to cut living expenses for families this winter.
Potential cuts in VAT to energy bills were touted by Vote Leave campaigners as a “Brexit dividend”, as EU rules stop countries from changing the rate, with some Tory MPs pushing the chancellor to now deliver on the policy as Brits face a cost of living crisis.
Energy bills rose across the board earlier this month as the government increased its energy price cap to £1,277 a month, with this cap likely to rise significantly again in April.
It comes alongside above expected rises in inflation and a recent cut £1,000-a-year cut to Universal Credit.
The Financial Times reports that Sunak is looking at cutting the 5 per cent rate of VAT on energy bills in his 27 October Budget to ease the squeeze on families.
“It would tick two boxes — it reminds people of the benefits of Brexit and shows you’re listening to people,” one Treasury official said.
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