Government will 'cash in' on fuel bill taxes

The government is going to make millions out of taxes as a result of soaring energy prices, it has been claimed.

According to the Cut the VAT campaign to reduce value added tax (VAT) on building repair and maintenance work, fuel prices are expected to rise by as much as 25 per cent this autumn, potentially swelling the Treasury's coffers by an additional £0.3 billion.

Householders are levied five per cent VAT on their fuel bills, equating to as much as £1.6 billion for the Treasury if energy prices continue to rocket, while around 4.5 million UK homes are currently living in fuel poverty.

Brian Berry, Federation of Master Builders director of external affairs, commented: "The truth is that current high rate of VAT on building repair work prevents people, particularly those on low-incomes, from maintaining their homes."

Members of the Cut the VAT campaign calling for greater efforts to tackle fuel poverty and rising fuel bills include the Federation of Master Builders, the TaxPayers' Alliance and National Energy Action.

Homeowners who are keen to become more energy efficient may want to renovate their existing property or self build a more environmentally-friendly house.

Around 53 per cent of UK homeowners are looking at ways to become more energy efficient and reduce their impact on the environment, research by Tescocompare.com has found.