Treasury extends zero VAT on domestic electricity to 30 June 2027

Domestic electricity on the island will stay free of VAT, rather than reverting to the standard 5%, until 30 June 2027, the Treasury has confirmed after the UK Autumn Statement of 28 October.

The Isle of Man Government said the zero rate began on 1 October 2026 and was originally set to finish on 31 March 2027. Manx Radio observed that households will now get an extra three months of relief.

The Government said the 5p-a-litre reduction in fuel duty will also stay in place to 30 June 2027, as required by the Customs and Excise Agreement with the UK.

The lower duty rate on red diesel, brought in on 15 June, will likewise run to that date. It had been scheduled to lapse at the end of this year.

Manx Radio said the extensions form part of a wider group of UK measures that the island takes on under its arrangements with the UK.

Treasury Minister Michael Crowe MHK said his department was going through the UK Government’s announcements to establish whether any would affect the island. 3FM reported him as saying the island would follow some of the UK’s measures.

Looking to the island’s own Budget, due in February 2027, Mr Crowe said the Treasury’s priority was to “strike the right balance between supporting people and businesses today and maintaining strong, sustainable public finances” for the years ahead.

Manx Radio reported that the Budget will be presented at Tynwald’s February 2027 sitting.

In Westminster, Chancellor John Healey said his Budget would give families and businesses “breathing space” from rising costs, according to Isle of Man Today and Energy FM.

Among the UK measures was a one-off £100 Household Energy Payment, open to as many as 20 million households in council tax bands A to D in England. Isle of Man Today reported that funding for comparable support would be passed to the rest of the UK. Energy FM said a temporary increase in bank taxes would pay for it.

Isle of Man Today also reported that the UK Government will ask Ofgem, Great Britain’s energy regulator, to scrap gas standing charges and absorb them into unit rates.

Energy FM reported that the national minimum wage and living wage will go up by almost 4%. The station added that gambling taxes will rise to pay for business rates relief, with the cut-off for retail, hospitality and leisure businesses moving from £12,000 to £18,000.

The Treasury has not said whether the island will bring in an equivalent of the household energy payment or any other UK measure. It has said only that it is reviewing the announcements.