VAT on electricity drops to zero on 1 October and runs to 31 March 2027. The first Pension Schemes Act 2026 commencement regulations took effect on 29 June. Company insolvencies fell 10% year on year in June. HMRC has opened a consultation on inheritance tax and pensions. The DWP is planning another on flexible apportionment.
What does the VAT cut on electricity cover?
Less than the headline suggests. Read the scope carefully.
The government announced on 21 July 2026 that VAT on qualifying domestic electricity falls from 5% to 0%. It runs from 1 October 2026 to 31 March 2027, the end of the financial year. Any extension is a Budget decision in the autumn.
Four limits matter. It covers electricity only, not gas. It applies in Great Britain. Northern Ireland is out, because the Windsor Framework governs energy VAT there, and its Executive gets equivalent funding instead. It reaches households, charities’ non-business use, care homes and small firms already on the domestic rate. And it is temporary.
A typical household saves around £45 a year. It costs the Treasury roughly £850 million. The money comes from scrapping the Digital ID programme.
For firms with charity and care clients, the declaration is the practical point. Many bodies get the reduced rate by certifying to their supplier that the supply qualifies. If the zero rate works the same way, suppliers will keep relying on those certificates. The duty to get it right sits with the customer. Now is a sensible moment to check the certificate is still accurate.
The first Pension Schemes Act rules take effect
The Pension Schemes Act 2026 (Commencement No. 1) Regulations 2026 were made on 22 June and brought section 123 into force on 29 June 2026. The Act itself received Royal Assent on 29 April 2026.
Section 123 changes how the Pension Protection Fund sets its levy. The PPF can now cut the levy to zero where it is not needed. It can raise it again if conditions change. A new safeguard caps yearly rises at last year’s levy plus 25% of last year’s levy ceiling.
A second change lands the same day. It matters more to anyone enforcing a ruling. The Pensions Ombudsman now counts as a competent court for recoupment purposes. Trustees with an Ombudsman ruling in their favour no longer need a separate county court order. They can offset the overpayment against future pension even where the member disputes the amount.
That reverses the position set by earlier case law. Trustees had been left holding a ruling they could not act on without going back to court.
Company insolvencies fall again in June
England and Wales saw 1,845 registered company insolvencies in June 2026. That is level with May and 10% below June 2025.
The breakdown was 276 compulsory liquidations, 1,364 creditors’ voluntary liquidations, 191 administrations and 14 company voluntary arrangements. No receivership appointments were recorded.
One in 198 companies on the effective register entered insolvency in the 12 months to 30 June 2026. A year earlier the figure was one in 191.
The direction is the useful part rather than any single month. Creditors’ voluntary liquidations still dominate the series. That pattern looks like a market clearing slowly rather than one under acute stress.
The Pensions Ombudsman change is the one that alters day-to-day practice. Trustees who win a ruling on an overpayment can now act on it without a second trip to the county court. That removes a step which made recoupment disputes slow and costly to finish.
What is HMRC doing on inheritance tax and pensions?
HMRC has published a technical note on how inheritance tax applies to pensions. A consultation sits alongside it. That covers draft rules on how personal representatives and pension schemes swap information.
The information duty is the part that lands on private client teams. Personal representatives will need scheme data to finish an estate. Schemes will need to know what to send and when. Getting that flow wrong delays probate.
HMRC promises further guidance and tools by spring 2027. Firms doing probate work should use the consultation to say what they actually need. The rules will set the timetable everyone then works to.
The tax side of pensions is moving on several fronts. The Legal Brief covers the Finance Bill measures in its report on the draft clauses.
Why is the DWP reviewing flexible apportionment?
Because of one transaction.
The Pensions Minister, Torsten Bell, announced the review on 17 June 2026. The DWP will consult later this year on whether the flexible apportionment regime needs strengthening. The trigger was the Aberdeen and Stagecoach transaction. The department called it a novel use of the mechanism: a defined benefit scheme bought as an asset, to be run on for its surplus.
Flexible apportionment lets employers in a multi-employer scheme reallocate liabilities between themselves without triggering a debt. The regime was built for corporate reorganisation, not for buying a scheme as an investment.
The consultation has not opened. Log it now. A second pensions consultation before year end is easy to miss alongside the surplus work already running. The Legal Brief covers that in its report on DB surplus release.
The Insolvency Service publishes its full series in the June 2026 commentary. The Act commencing this month is the Pension Schemes Act 2026. PKF Littlejohn has published a practitioner note on the electricity VAT cut.