A reduction in VAT on domestic electricity bills will take effect from October 1, Treasury has confirmed.
It follows the UK Government announcing the rate will drop from 5% to 0%.
Under the Customs and Excise Agreement, the Isle of Man must apply the same VAT rates as the UK, meaning Manx Utilities will implement the change automatically for eligible customers. The reduction will appear on bills from October.
The 0% rate will apply to domestic customers and others who qualify for domestic‑rate energy VAT relief, including small businesses using under an average of 1,000 kWh per month, eligible charities and residential care homes.
Electricity tariff rates themselves are unchanged, the saving comes solely from the VAT reduction.
Treasury says customers do not need to apply, and smarterPAYG users will benefit in the same way as other qualifying customers. Further information will be issued ahead of the change.
Current VAT rules are set out in HMRC Notice 701/19.
