Wat er gebeurde
HM Treasury published the Budget 2026 on 28 October 2026. Its energy bills section is aimed at households: it says household energy prices are 73% above their 2020 average. The main measures, checked against the Budget report and HMRC's overview of tax legislation:
- VAT on domestic electricity: the temporary 0% rate that started on 1 October 2026 is extended by three months. The Budget says it is expected to take around £50 off the annual Ofgem price cap in April 2027. HMRC's overview says secondary legislation will be laid in early 2027 and the zero rate will run until 30 June 2027.
- Household Energy Payment: £100 for households in council tax bands A to D in England from January 2027, up to 20 million homes, at a cost of £2.6 billion. To help pay for it, the Bank Corporation Tax Surcharge rises from 3% to 6% from 1 January 2027 to 31 March 2028, to be legislated in Finance Bill 2026-27.
- Gas standing charges: currently £108 a year for a typical billpayer. The government has asked Ofgem to abolish them on domestic bills, aiming for the end of 2027 or as soon as possible after, with the costs recovered through unit rates instead. In a news story issued that morning, the Treasury estimated about 60% of account-holding households could save around £45 a year on average; the Budget accepts some households may be less able to benefit and promises targeted mitigation. Electricity standing charges will be reformed, with details next year.
- Energy debt: a joint government and Ofgem strategy, the Energy debt circuit breaker, with a one-off debt relief scheme for eligible households. The Budget puts household energy debt at over £5 billion.
- Home heating: £1 billion of capital grant is saved from the Warm Homes Plan, while most of its funding for low-income households and social housing is protected. The Boiler Upgrade Scheme stays at £400 million in 2027-28, rising broadly with inflation after that, and the new Warm Homes Loan Scheme offers no- and low-interest loans for heat pumps, solar panels and batteries.
- Heat batteries: added to the VAT relief for energy-saving materials from 1 April 2027 when installed in homes or charity buildings. On the same date the relief reverts from 0% to 5%, as planned since 2022.
Wat het betekent voor uw bedrijf
Your own bills are not in this package. The standing charge change covers domestic bills only, and the VAT cut covers domestic electricity, not supplies taxed at the standard 20% rate. If your business pays a gas standing charge, nothing in the Budget removes it. The free business electricity and gas prices tool shows what firms of your size have been paying.
Your staff will notice it. Lower electricity VAT and the £100 payment ease household bills this winter, which matters to people working from home and to anyone on lower pay. Moving gas standing charges onto the unit rate means a household that uses more gas pays more for each kWh, while low users save.
Your carbon figures stay the same. Emissions follow kWh, not price. If you count homeworking in Scope 3, the government's 2026 factor is 0.32393 kg CO2e per full-time-equivalent hour, covering heating and equipment. An illustrative team of 10 people at home 2 days a week for a 13-week winter quarter works 1,950 hours, which is 0.63 tonnes CO2e. A cheaper bill does not lower that. Burning less gas does: every kWh of natural gas saved avoids 0.18231 kg CO2e.
Landlords and property owners should note the heat battery VAT change, the end of the 0% rate on energy-saving materials on 31 March 2027, and the smaller Warm Homes Plan grant budget when planning upgrades to homes they let.
Wat u nu moet doen
- Check your own contract. Find your gas and electricity standing charges and unit rates, and when the contract ends. None of today's household measures changes them.
- Tell staff what applies to them. A short note on the VAT extension, the £100 payment and where to find the Warm Homes Loan Scheme is practical help, without giving financial advice.
- Keep counting homeworking hours. Our guide to homeworking emissions shows how, and the carbon maths of a heat pump shows what replacing a gas boiler does for your own building.
- Watch for Ofgem's plans for removing domestic gas standing charges, and the electricity standing charge details due next year.
