Electricity VAT reduction from
October 26

From 1 October 2026, eligible electricity supplies in Great Britain will have VAT removed from bills.

The Government has introduced a temporary reduction in VAT on qualifying electricity supplies, running from 1 October 2026 to 31 March 2027.

What does this mean for WME customers?

The change will affect WME customers who already qualify for the reduced 5% VAT rate on their electricity – These will predominantly be academy schools, church schools and residential sites.

For these customers, the VAT rate applied to qualifying electricity invoices will reduce from 5% to 0%

This means that, from 1 October 2026, customers currently paying 5% VAT on their electricity will no longer pay VAT on qualifying electricity supplies during the six-month period.

The change applies to the VAT treatment of the electricity supply; it does not change the underlying cost of the energy itself and gas is not covered by this reduction. 

What do customers need to do?

Nothing - WME's invoice validation team will ensure that the correct VAT rate is applied to customer bills following the change.

As with any change to VAT treatment, the precise application will depend on whether the electricity supply meets the relevant qualifying conditions. HMRC has confirmed that the temporary 0% rate applies to qualifying supplies from 1 October 2026 to 31 March 2027.

Customers can therefore be reassured that WME will continue to monitor and validate invoices to ensure that the correct VAT treatment is applied.

A temporary change

The 0% VAT rate is currently scheduled to apply for six months, from 1 October 2026 until 31 March 2027. After this period, the VAT treatment will revert to the applicable rate unless further changes are announced.

WME will continue to monitor the position and keep customers informed of any further changes that may affect their energy bills.