Haha! You didn't notice the taxman pocketing this

It's not just energy providers that are raking it in...

The energy market of late has been like watching a row of dominos falling over, just in super slow-mo. Scottish Power was the first to announce price rises back in June, of 19% for gas and 10% for electricity. In July, British Gas joined the fun, ramping up gas prices by 18% and electricity costs by 16%.

E.On, Scottish and Southern Energy and npower followed suit, before EDF Energy rounded off the Big Six’s price rises last week with an additional 4.5% on electricity and 15.4% on gas prices.

It’s pretty clear who the big losers are in all of this – the customers, people like you and me. And the winners are obviously the providers, pocketing extra cash all down to those pesky ‘wholesale costs’ which keep going up.

But there’s another big winner of all these price rises. The taxman...

A tax windfall

It’s a sometimes overlooked fact that VAT is charged on energy spending, albeit at a reduced rate of 5% (compared to the current 20% rate for most spending). And as a result of the price rises, the Treasury is looking at a windfall of an extra £197m next year.

Not a bad little earner.

Energyhelpline is campaigning for the Government to cut VAT on energy costs to 4% immediately to give a helping hand to those of us facing escalating bills, as this would see a return of £13 on the average bill. And while it would be nice to see – particularly as the Energy Minister Chris Huhne is talking tough about dealing with energy firms’ profiteering – I’m not holding my breath.

It’s down to us to keep our energy spending as low as possible in the coming months. So what can we do?

Get switching

The most obvious, and easy, way of cutting your energy tax bills is to move to a better tariff. And moving to a fixed deal is probably the smartest move of all, with this unlikely to be the last round of hikes in prices that we’ll see in the coming months.

Here are some of the best fixed deals around at the moment

To compare energy quotes, check out our gas and electricity comparison engine.

Only pay for what you use!

The concept of an estimated bill blows my mind. I don’t understand how we can be charged what is essentially a guess. But energy firms will rely on them, if they can’t get access to your meter.

That’s why it’s really important to keep on top of how much you’re using, and keep your provider informed with regular readings. At home we are on an npower tariff, so I use the npower app on my phone to update them with our readings!

Yes it’s a pain, but it’s worth it. It also should help you keep on top of any faults with your meter, a fault that may end up seeing you overcharged!

Get insulating

Improving your insulation won’t just help save the planet, it will help save your bank balance too!

If your home is properly insulated, it means that you keep the heat in, thereby cutting the amount of energy you need to use to keep the property nice and toasty. And that means less money heading to the energy providers. According to the Energy Saving Trust, loft insulation can save you as much as £150 a year, while cavity wall insulation can save around £115 a year.

What’s more, you may even be able to get the Government to pay for it! That'll teach the taxman to take more money out of your pocket!

Every little helps

Finally, there are all sorts of little things you can do which will help to keep your energy usage as low as possible. These range from bleeding your radiators regularly to defrosting your freezer every couple of months, using energy saving lightbulbs and remembering to turn off electrical appliances at the wall, rather than leaving them on standby.

Why not share some of your best energy saving tips below?

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