Families could end up sending an additional £ 35 each to the government as part of the price hikes currently planned for their energy bills next spring
The Treasury is set to seize an estimated £ 973million windfall from families when energy bills soar in April.
Ministers are resisting calls by Labor and the Mirror to cut 5% VAT on dual fuel costs, despite growing fears that the impending rise in bills could push more households into poverty.
With average bills set to climb by £ 700 when the price cap is revised in the spring, this means households will be paying an additional £ 35 each to the government through VAT.
The global rise in energy prices is expected to cost families a total of around £ 19.46 billion, based on the 27.8 million UK households affected each by an average increase of £ 700.
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Phantom Chancellor Rachel Reeves told the Mirror: “Right now people are hit by a cost of living crisis which has seen energy bills skyrocket, food costs rise and the weekly budget stretched. .
“This is why Labor is calling on the government to immediately remove VAT from national energy bills during the winter.
“We need a sustainable and ambitious approach to energy, which is why the Labor Party would also increase its ambitions with our plan to renovate 19 million homes and secure our energy supply chain.
“Conservative complacency is worsening the cost of living crisis and accumulating long-term problems, workers are paying the price. “
Treasury sources have claimed that rising energy prices actually reduce the amount of money taken from taxpayers through VAT.
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They said that when families spend more on gas and electricity, which have a 5% VAT rate, they spend less money on other goods which have a 20% VAT rate.
A government spokesperson insisted: “There was no VAT windfall.
“High energy prices are actually reducing VAT revenue, with revenue this year expected to be £ 2 billion less than the amount collected directly before the pandemic.
“We have introduced a series of measures to support vulnerable households with the cost of energy – including increasing the rebate for warm homes, winter fuel payments, and weather-2019-what- payments. 13874235> Cold weather payments.
“This is accompanied by the introduction of the £ 500million household support fund and the granting of universal credit to working families on average £ 1,000 more per year.”