What does the temporary VAT reduction mean for my One Utility Bill package?

What is it?

The Government is reducing VAT on household electricity bills from 5% to 0% between 1st October 2026 and 31st March 2027.

How does it impact me?

• All One Utility Bill customers will see this discount in their monthly payments, regardless of their package type.
• You’ll receive the total discount for the October-March period, spread across the remaining months of your contract.
• If you have more than six months left on your contract on October 1st, you'll see a smaller discount across more payments, but it will be the total you're owed according to the Government's discount.

👇  The graph below is an example to show how the discount will be applied to an example package price. (Based on a 12-month contract starting in October 2026)

Here are a few examples of how the discount could look depending on when your package was set up:

(FYI, these figures are illustrative, based on the October Ofgem price cap)

Example 1: 12-month contract starting in November

Contract: November 2026-October 2027
VAT reduction period included: 5 months (November-March)
Saving for those 5 months: £18.75

Spread across the 12-month contract:

£18.75 ÷ 12 = £1.56 off per month

This will look different if you have a package including bill sharing: For example, for a 2-occupant package, the £1.56 monthly discount is split between both occupants: £1.56 ÷ 2 = 78p off per person, per month

Example 2: 12-month contract starting in December

Contract: December 2026-November 2027
VAT reduction period included: 4 months (December-March)
Saving for those 4 months: £15.00

Spread across the 12-month contract:

£15.00 ÷ 12 = £1.25 off per month

This will look different if you have a package including bill sharing: For example, for a 5-occupant package, the £1.25 monthly discount is split between all occupants: £1.56 ÷ 5 = 25p off per person, per month