Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what assessment his Department has made of the potential merits of reducing VAT on domestic energy in response to rising fuel costs.

This question was answered on 19th January 2022
In recognition of the fact that families should not have to bear all the VAT costs they incur to meet their energy needs, the Government already maintains a reduced rate of 5 per cent VAT on the supply of domestic energy, at a cost of £5 billion per year.

Although the Government keeps all taxes under review, going further would impose additional pressure on the public finances, to which VAT makes a significant contribution. VAT raised around £130 billion in the year 2019-20, and helps to fund key spending priorities, including on health, education, and defence.