A council tax rebate could see millions getting money back as energy bills soar | Personal Finance | Finance

It could mean millions of people are given council tax rebates worth hundreds of pounds. The plan, reportedly being considered by ministers, is said to intend to provide significant discounts on bills for people with homes that fall under the council tax bands A to C.

Those in the lowest bands could potentially receive the highest discounts.

Mr Sunak is believed to be advocating for Government support to be targeted at low-income households.

This plan could offset high rises in energy bills for those most affected by the cost-of-living crisis.

The energy price cap is forecast to rise by about 50 percent to as much as £2,000 a year from April this year.

This means that 22 million households could face higher bills.

However, other proposals to increase people’s benefit payments, specifically the Winter Fuel Allowance and Child Benefit, have been criticised.

One Government source said:

“This is about helping people on both low and lower-to-middle incomes.”

Overall, ministers have acknowledged that since council tax bands were established as far back as 1991, many of the people who could stand to benefit from the council tax rebate would effectively be relatively wealthy individuals in London and the South East.

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Another Government source has said Mr Sunak is also exploring the possibility of a package of measures, reports The Times. 

This would aim to provide help for all households with extra benefits for those least able to afford the price rises.

In addition, the Treasury is understood to be considering an industry scheme that would allow energy companies to borrow money to keep bills lower than they would otherwise be in April 2022.

The possibility of cutting VAT on energy bills remains a topic of key importance within the Government.

The cuts could come in the form of a combined mix and match and targeted approach offering money to low-income households.

The Government source has added that Mr Sunak’s announcement may come around the same time that the industry regulator Ofgem sets the new tariff for the maximum limit that energy companies can charge customers.

This new tariff is set to come into effect in February this year.

Ofgem notes that the number of households covered by the energy price cap has soared to 22 million, up from 15 million in August 2021.

Millions of households have thus opted to roll on to default standard variable tariffs that are covered by the cap when their previous fixed-price deals have ended.

This is due to the lack of cost-efficient fixed deals on the market.

Up to 2.3 million households have been moved on to standard variable tariffs over the past six months.