Vote Leave: UK could scrap VAT on household energy bills

The UK could scrap VAT on household energy bills if it left the EU, Vote Leave claims.

Campaigners for the Leave party such as Boris Johnson and Michael Gove wrote in The Sun newspaper that tax on energy bills cannot be scrapped because of EU rules.

The plan to scrap the VAT could save taxpayers £2 billion.

Member states are not allowed to go below 5% VAT on gas and electricity bills - and that is the current rate in the UK.

"The poorest households spend three times more of their income on household energy bills than the richest households spend", Mr Johnson and Mr Gove wrote in The Sun

"As long as we are in the EU, we are not allowed to cut this tax.

"When we Vote Leave, we will be able to scrap this unfair and damaging tax.

"It isn't right that unelected bureaucrats in Brussels impose taxes on the poorest and elected British politicians can do nothing.

"We'll also take back control of the VAT on fuel charged to motorists".

The potential change is also backed by Vote Leave chairwoman Gisela Stuart of Labour.

Energy secretary Amber Rudd Credit: ITV News

Energy secretary Amber Rudd - who backs the Remain campaign - hit back at the claims, branding them "fantasy economics", adding that leaving the EU would instead lead to "higher taxes".