Question to the HM Treasury:

To ask the Chancellor of the Exchequer, for what reason his Department is applying VAT on new connections to off-electrical grid homes; and what consideration he has given to lifting this on off-grid homes.

The VAT treatment of electricity connection charges depends on the nature of the supply and the circumstances in which it is made. Where a grid connection forms part of a qualifying domestic supply of electricity, it is subject to the same VAT treatment as that supply.

VAT is a broad-based tax on consumption, and the 20 per cent standard rate applies to most goods and services. Exceptions to the standard rate have always been limited and balanced against affordability considerations.