UK business calls for scrapping levies from electricity bills
Big business in the United Kingdom has called on the government to abolish taxes and levies in companies’ electricity bills in order to make energy costs more affordable and strengthen the country’s competitiveness. This was reported by OilPrice.
Business proposal
Industry associations, in a letter to UK Chancellor John Healey, proposed moving electricity levies from household and business bills to government expenditure. According to the letter’s authors, this would immediately make energy costs more affordable and competitive.
Business representatives also said that the current structure of such levies creates distortions that restrain investment in electrification. The letter from industry groups was provided to Bloomberg News, OilPrice notes.
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Changes for households
In July, UK Prime Minister Andy Burnham announced the new Labour government’s intention to abolish the 5% value-added tax on household electricity bills. Suppliers are expected to pass the VAT reduction on to all customers, including those on fixed tariffs.
The government said that abolishing VAT would be financed by cancelling the Digital ID programme, worth £1.8 billion, or $2.4 billion. The tax cut is planned to take effect from 1 October, ahead of Ofgem’s next review of the household energy price cap for October through December.
According to OilPrice, energy bills in the United Kingdom could reach a three-year high at the beginning of winter. Regulator Ofgem raised the cap on household costs by 4% for October through December due to rising gas prices linked to the war with Iran.
