Electricity VAT is Changing | What you Need to Know

Electricity VAT is changing from 1st October 2026.

From 1st October 2026 to 31st March 2027, qualifying residential electricity supplies that are currently charged at 5% VAT will temporarily move to 0% VAT.

What does this mean for you?

If you manage residential developments where electricity is currently being charged at 5% VAT, it’s worth checking that the change will be applied correctly from 1st October.

If Data Energy procures the electricity for your development, you don’t need to do anything. We’ll make sure the change is picked up with the supplier.

If your electricity is procured elsewhere, please check with your electricity supplier or broker that any qualifying supplies will move from 5% to 0% VAT from 1st October.

The change may be relevant to developments where electricity is used for residential electricity, cooling or air source heat pump (ASHP) systems.

Please note: the 0% rate only applies to electricity supplies that currently qualify for the reduced 5% VAT rate. Gas is not included and will remain at 5%.

Not sure if your development is affected?

Get in touch with your Client Account Manager and we’ll be happy to help.