UK households face new tax rules from October 1 – what to know

• VAT will be removed from household electricity bills on 1 October, saving average bill payers around £45 a year.
• The tax cut, introduced by Prime Minister Andy Burnham, coincides with Ofgem raising the energy price cap by £60 to £1,723 a year.
• Global energy costs driven by the US-Iran conflict could push the price cap up by 30 per cent to £2,098 in early 2027.
• The government is reportedly considering extending the VAT removal to gas bills in the upcoming Budget, potentially saving households a further £40.
• Taxes on both tobacco and vaping products will increase from 1 October, adding £2.20 per 10ml of vape liquid and 44p to a pack of 20 cigarettes.

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