VERDICT: MISLEADING. VAT has been removed only from household electricity bills. Gas still carries 5% VAT, and the overall bill may have gone up, because from 1 October the Ofgem price cap rose by 4%.
In conversations and on social media you often hear a simplification: “from October we don’t pay VAT on energy”. Many people take this to mean that their electricity and gas bill will be noticeably lower. We checked what the situation really is.
What we checked
The claim: from October 2026 there is no VAT on electricity and gas bills in the UK, so bills will fall.
How we checked
On 28 October 2026 we read two official sources: the Department for Energy Security and Net Zero (DESNZ) announcement on GOV.UK “Breathing space on your energy bill” (published on 26 August 2026, updated on 19 October 2026) and the Ofgem announcement on the price cap for the period from 1 October to 31 December 2026 (26 August 2026).
What is confirmed and what is not
True: from 1 October 2026 VAT (previously 5%) has been removed from household electricity bills. According to GOV.UK this is an average saving of about £45 a year. You do not need to apply. The cut also covers fixed tariffs and prepayment meter top-ups. Small businesses, charities and care homes that paid the reduced 5% VAT rate are on a 0% rate this winter.
False: gas is not covered by the cut. Ofgem gives gas prices under the cap “including 5% VAT”.
Misleading: “VAT-free” does not mean “cheaper than before”. From 1 October the Ofgem price cap rose by 4% for a typical household paying by Direct Debit, mainly because of more expensive wholesale gas. Ofgem itself notes that the full effect of the VAT cut may not be visible on bills. Households that use a lot of electricity, or have electricity only, gain the most.
Unclear: Ofgem writes that the zero VAT rate on electricity applies from 1 October 2026 to 31 March 2027. GOV.UK gives no end date and only refers to funding for the 2026/27 financial year. What happens after March 2027 has not been decided.
How to protect yourself
- Check on your bill that VAT on electricity is 0%. If it is not, ask your supplier.
- Do not respond to texts and emails about an “energy VAT refund” with a link. The cut works automatically, and nobody needs your card details.
- Forward suspicious texts to 7726 and emails to [email protected].
- Low-income families: check your eligibility for the Warm Home Discount (£150 off).
Sources: GOV.UK – Breathing space on your energy bill (26.08.2026, updated 19.10.2026); Ofgem – Changes to energy price cap between 1 October and 31 December 2026 (26.08.2026). Checked on 28.10.2026.
We assess factual corrections and substantive responses. Verified changes are reflected in our reporting.
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