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UK: Boris Johnson dismisses Tory’s request to cut VAT on energy bills

UK: Boris Johnson dismisses Tory’s request to cut VAT on energy bills
UK: Boris Johnson dismisses Tory’s request to cut VAT on energy bills

The Prime Minister of the United Kingdom, Boris Johnson, has reportedly knocked down calls for VAT to be completely removed from household energy bills, calling the move a brutal instrument.

According to reports, the PM stated that ministers have so far not ruled out providing additional support to households that face substantial rises in energy costs when the price cap is evaluated in April,.

Johnson did, however, suggest that eliminating VAT is not the most effective strategy to extend help to consumers that are most in need.

Meanwhile, the Labour Party accused the PM of not respecting the ‘Vote Leave’ campaign promise he made at the time of the 2016 Brexit referendum, where he committed to remove VAT from the nation’s domestic fuel bills.

The Prime Minister conceded at a Downing Street press meeting on Tuesday that Britain now has the authority to establish its own VAT rates after leaving the EU. However, he was quick to add that it is ironic that this issue is being campaigned for by individuals who actually wanted to, and still want to, stay in the EU, where it would have been impossible to deliver on such a commitment.

PM Johnson's official spokeswoman had previously stated that ministers would evaluate any recommendations but cautioned that the motives for the surge in fuel prices were universal.

Additionally, green taxes on bills to finance renewable energy were also justified by Number 10.

As per some estimates, millions of households on ordinary tariffs might see their energy costs increase by more than 50% in April.

The price ceiling, which regulates how much providers may charge, will be raised in April. It is presently at £1,277, which is a new high. However, analysts believe this will rise to £1,995 in April.

The cap hikes are the result of a significant increase in gas prices across the world, raised higher by growing demands throughout the globe.

As per HMRC estimates, eliminating VAT on energy bills would have likely cost UK government roughly £1.7 billion in 2021.

Rachel Reeves, shadow chancellor, stated that Boris Johnson had pledged three separate times during and after the Brexit referendum campaign to decrease VAT on home energy prices. But now he is willing to break his word, and is attempting to muddy the waters with regards to a move that would help people cope with skyrocketing energy expenses.

Reeves further stated that this winter, labor would remove VAT from residential energy bills to help families to cope with rising prices.

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Vinisha Joshi

Vinisha Joshi

Despite graduating with an engineering degree in electronics and communication, Vinisha Joshi chose the road less travelled, and decided to pursue her career in content writing . Currently, she pens down articles for and a few other distinguished news platforms, pertaining to business and finance.