Fuel and power (VAT Notice 701/19)

On 21 July 2026, the government announced a temporary zero rate of VAT for Great Britain (England, Scotland and Wales) for domestic supplies of electricity and other supplies of qualifying use.

The temporary zero rate applies from 1 October 2026 to 31 March 2027. During this period, qualifying supplies of electricity in Great Britain are liable to VAT at 0%. Read section 3 of this notice for what is meant by qualifying use.

In Northern Ireland, qualifying supplies of electricity remain liable to VAT at the reduced rate of 5%.

There are no changes to the supplies of electricity that qualify for relief.

This notice explains how suppliers and users should treat supplies of fuel and power for VAT purposes.

It also tells you how to treat a number of other supplies connected with fuel and power.

Unless otherwise specified, legal references will be from the VAT Act 1994 (VATA 1994).

Under the act supplies of fuel and power are subject to the standard rate of VAT unless they are eligible for the reduced rate under schedule 7A or being exported outside the UK under the conditions set out in VAT on goods exported from the UK (VAT Notice 703).

Find information about the current rate of VAT.

For VAT purposes the supply of heat, power, refrigeration or ventilation is a supply of goods (VATA 1994 schedule 4 paragraph 3). As such the rules surrounding time and place of supply are those associated with goods rather than for services.

The reduced rate of VAT applies to supplies of fuel and power for qualifying use. Section 3 explains what qualifying use means.

The following supplies are considered qualifying use: