UK consumers are backing calls for the Government to axe VAT on household energy bills, new research shows.
A resounding 98 per cent of people think the tax should be scrapped, according to a survey by uSwitch.com.
The move would see energy zero-rated for VAT, the same as water, taking an estimated 250,000 households out of fuel poverty and saving the average consumer £60 a year, the comparison service said.
More than half of consumers polled by the switching site said they would use the potential saving to keep warm in winter, while others said they would be able to stop rationing their energy use.
Many would look to invest the money saved into making their homes more energy efficient which would help reduce their bills even further, the research indicates.
But while the move would undoubtedly help UK consumers, it seems the Government might not be able to help even if it wanted to, uSwitch warned.
According to HM Revenue & Customs, under EU agreements the UK can retain zero-rates that were in place on January 1, 1991, but cannot introduce new zero-rates or extend existing ones.
Ann Robinson, uSwitch.com’s director of consumer policy, said: “If the Government wants to give householders respite from the high cost of energy it will have a battle on its hands.”
Household energy was previously zero-rated in the UK, but this was stripped away as part of the 1993 Budget.
06/03/2012 - myfinances.co.uk
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