VAT cut from electricity bill

Residents will benefit from 0% rate set by UK Government

Islanders will benefit from a reduction in VAT charged to electricity bills. 

Starting today (1 October), the rate drops from 5% to 0% for all domestic electricity bills following the change in the UK. 

This relief will extend to small businesses that qualify for domestic energy VAT relief and are not VAT registered, as well as eligible charities and residential care homes. 

Qualifying small businesses are those where electricity consumption is below an average of 1,000 kWh per month.

Manx Utilities said: "We've already updated our systems, so customers do not need to take any action.

"The change will be applied automatically to domestic electricity accounts or commercial customers who qualify for the reduced VAT."

The temporary zero rate applies from 1 October 2026 to 31 March 2027.