Sunak to bring in windfall tax as Brits hit with 'extraordinary' bill increase
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It comes as Mr Sunak today (May 26) announced measures to alleviate the spiralling bills in a statement to the House of Commons. Energy bills have been soaring for millions of Britons, with bills expected to soar further, should the price cap (maximum annual tariff) rise to £2,800 as predicted by industry regulator Ofgem.
Ofgem’s boss has claimed that this could push 12 million people into fuel poverty.
And coupled with a cost-of-living crisis as inflation soars too, the Government had been urged to intervene.
Today, Mr Sunak pledged that support would be “timely, temporary and targeted”.
The Chancellor announced that a windfall tax on oil and gas companies that have seen “extraordinary profits” due to soaring energy prices will come into effect.
This will involve a “temporary targeted energy profits levy” which will have a “new investment allowance” built-in.
Energy companies’ profits will be taxed at a rate of 25 percent, but this will eventually be phased out.
Mr Sunak said this will let the Government raise an additional £5billion in tax revenue.
This will help the Chancellor fund the next measure he announced, a £650 one-off cost of living payment to eight million families struggling to pay their bills.
It will be sent in two payments, one in July and another later in the autumn, and it will go directly into people’s bank accounts.
This comes after the Chancellor announced a £200 discount from October for all households on energy bills.
But now, people will not have to pay that money back and it will be given by the Government as a grant.
This amount will also now be doubled to £400 for every household.
The new measures total in at £15billion, bringing the total Government support package to £37billion.
Adding to this are new green energy rules, where property owners who do not meet the minimum Energy Performance Certificate (EPC) rating of “band C” will have to fork out extra cash for upgrades.
According to research company Outra, this will affect three million rental homeowners.
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Propertyinvestments.co.uk says that due to a large number of old properties, up to two-thirds of all homes in the UK could have an EPC rating poorer than C.
Existing lets will have a deadline of 2028, while newly let properties have a planned deadline of 2025.
The average cost of upgrades is estimated to be £7,646 per property.
This brings the collective cost for all privately rented homes to £23billion over the next six years, Outra reports.
EPCs were brought in back in 2007 to measure the energy performance of a building.
An EPC rates properties on their energy efficiency rating from A (the most efficient) to G (the least efficient) and it is valid for 10 years.
It is part of the aim to slash carbon emissions from buildings and improve the energy efficiency of homes.
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