However, with communal energy suppliers currently not able to benefit from the tariff price cap, CEP are actively calling for the appropriate sanctions to be put in place to support its residents. One of those being the removal of VAT from energy bills.
Removing VAT from energy bills, which is currently levied at 5%, would save £90 a year for the average household, the Telegraph reports.
That’s likely to only take the edge off, but teamed with some other measures such as freezing council tax and increasing the value and eligibility of the Warm Home Discount scheme, it could make all the difference.
As things stand, energy bills could eat up more than half of some UK households’ incomes, as per calculations from the Joseph Rowntree Foundation (JRF). More and more people are going to be faced with ‘heat or eat’ decisions. We can’t let it happen.
Lest we forget that this all comes after a Covid-stricken two years. People will naturally want to do a bit of living, free of restrictions, in the coming years – but they will be beset with the struggles of simply trying to get by.
We stand with residents
Here at Communal Energy Partners, we have experienced first hand how upset energy consumers are about this situation. And we understand the anger, we really do. Residents feel like they’re getting unfairly treated, and in many ways they are.
Communal energy supply is not protected by the government’s price cap, meaning residents are at the mercy of suppliers, who themselves have no choice to pass on the rise in wholesale costs.
Unable to change suppliers or the tariff they’re on, residents are fully exposed to market changes, with none of the protection that households with conventional heating systems enjoy.
The regulator might feel powerless to step in, but the government can help smooth out the cost to the customer by removing VAT from bills. CEP are taking proactive measures to drive influential figures to listen and act on this.
Through having influential conversations with the UKDEA (UK Distribution Energy Association), who operate in the interests of energy providers and consumers across the UK, the industry stands together and all have the same goal of driving action.
In addition to this, CEP have signed a letter to the Chancellor from ADE (Association for Decentralised Energy) which is calling for ‘zero rate’ VAT on insulation products for energy efficiency.
Update August 2022:
Following a report published by the BEIS Select Committee which labelled the energy support package as insufficent, Rish Sunak has pledged to temporarily scrap VAT on house holds energy bills.
This pledge is to aid the current energy crisis, Rishi Sunak added “This temporary and targeted tax cut will get people the support they need while – also critically – bearing down on price pressures.”
