This week, the Chancellor did not cut VAT on household energy bills. Currently, 5% of our energy bill expenditures go to the IRS.
Some people want the Chancellor to lower the VAT on energy bills. These people think it will help families who are struggling with high energy costs.
The price cap went up by 12% at the beginning of this month, which means people’s energy bills increased by 12%. This increased the bill for people at regular prices. If you use a lot of electricity, your bill will increase to £1,277 per year.
The British government wants to lower the number of money families pay for electricity and gas. They want to do this by lowering the Value Added Tax (VAT). A Whitehall source told BBC that this change would not be helpful because it would only help some families and not all.
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What are programs available for families who have a low income?
If you have a hard time paying your energy bill, there are some things you can do. These include:
- This is one-time spending of £140 that lowers your energy costs by 10% over a year.
- However, not all providers are in the program. For example, people have to go first if they want to be in it. By 2022, government officials hope to raise the amount to £150 and let almost three million homes across England, Wales, and Scotland into the program.
- When it is cold, there is money for people with low incomes. The government will pay them. It is £25 per week when it gets very cold, like in the wintertime.
- The Warm Home Discount Scheme is similar to the new scheme. It helps families who live in homes heated with oil. Families get money every month, covering all of England, Scotland, Wales, and Northern Ireland.
- Winter fuel payments are for people over the age of 65 who live in homes where someone is at least that old. The payment is a one-time payment of between £100 and £300.
- It’s automatically paid and covers the whole UK. Like the Cold Weather Payment.
What do you do when you have trouble paying your energy bills?
There are 1.2 to 1.5 million homes that may not heat and power their homes by April 2019. This is because they do not have money for it.
There are four million people who are not paying their energy bills.
You can’t find cheaper power bills right now. Internet energy comparison sites are not helpful because they cannot match the price cap.
As a result, you can ask your current provider if they have any special offers for changing suppliers.
Energy providers in the UK are struggling to offer cheap rates. They are compensating for the higher costs with price caps.
If you can’t afford your energy bills, you should contact them and ask to work out a payment plan.