Burnham’s energy bill tax cut explained – how much will you save?

• Andy Burnham, in his first major move as prime minister, has announced the scrapping of VAT on household electricity bills.
• This policy, effective from 1 October, is expected to save a typical household £45 annually by reducing VAT from 5 per cent to zero.
• The government stated that the measure aims to provide families with 'breathing space' amidst rising living costs and will apply across England, Scotland and Wales.
• Funding for the VAT cut, estimated at £850m this financial year, will come from cancelling the government’s planned Digital ID programme.
• The move is also expected to shave approximately 0.10 percentage points off CPI inflation and will benefit all households, as well as eligible small businesses, charities, and residential care homes.

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What does Burnham’s VAT cut mean for your energy bills?