Energy firms could get access to HMRC income data to help decide which households receive cheaper bills – and which could end up paying more under new legislation.

The plans are part of the Energy Independence Bill, which was introduced to Parliament last week.

The bill includes measures ranging from ending new North Sea oil and gas licences to giving energy regulator Ofgem stronger powers over suppliers.

If passed, it will also give ministers new powers to set up schemes that cut bills for struggling households.

To help offer more targeted energy support schemes, the Government is seeking to change the law so it can share more of the information it holds about people with energy suppliers.

No new energy support scheme has been designed yet, and Government documents suggest none would be in place before winter 2028-29 at the earliest. 

But the powers would allow future schemes to target money off energy bills more precisely.

Who could pay more

Currently, the main help with energy bills is based on benefits or property values rather than income.

The warm home discount takes £150 off the bills of around six million households on benefits, with the cost added to everyone’s bills – about £39 a year for a typical household for the 2025-26 scheme, according to Government figures.

A separate £100 energy payment, announced in last month’s Budget, will go to around 20 million households in council tax bands A to D this winter – based on the value of people’s homes rather than what they earn.

Future schemes could instead use income data to decide who gets help, reaching people on low incomes who do not claim benefits.

The cost could be covered by the taxpayer or energy companies.

But impact assessments published alongside the bill, setting out its likely effects, say that if it is added to bills it would fall “principally on those most able to pay”.

Households not eligible for help are likely to be on higher incomes and “are expected to face higher bills” in that case, the documents say.

They add that better data could identify “households in need and potentially households most able to fund the scheme”.

That could mean households that get help are let off paying towards it, or that costs are shared out according to what people can afford – with the documents suggesting “there may be options to spread the costs more fairly among consumers based on ability to pay”.

What data could be shared

HMRC income and child benefit records are among eight sets of government data that could be shared.

Others include benefits and pensions records from the Department for Work and Pensions (DWP), property records and energy efficiency ratings for homes.

At the moment, the law only allows the Government to share this kind of data with energy suppliers to help households in fuel poverty – those on low incomes living in homes that are expensive to heat.

The bill would change the law so data could also be used to help people outside that group, such as those facing high bills, hard-to-heat homes or extra energy needs because of a health condition.

Government departments would not be forced to hand data over, and nothing could be shared until ministers had set up a specific scheme through further legislation.

But energy firms could be required to share their own customer data with the Government once a scheme was running.

Why ministers want the change

The impact assessments also argue that existing help misses too many people, because it relies on benefits records rather than household income data to find those on low incomes.

Some 42 per cent of households in fuel poverty do not claim a benefit, according to the Department for Energy Security and Net Zero (DESNZ), and around half of the poorest households are expected to miss out on the discount.

The department also argues that many more struggle without counting as fuel poor: 2.36 million households in England were in fuel poverty in 2025, but it estimates 7.6 million – almost a third – needed to spend more than a tenth of their income on energy.

When bills soared in 2022-23, ministers say a lack of data meant most help, including a £400 discount, went to every household – with better-off households who “may have maintained comfortable heating levels regardless of support”.

What politicians have said 

Andrew Bowie, the shadow energy secretary, told , which first reported the plans, that the Government was waging “class warfare” on energy bills.

“Working people did not vote for a big brother state that spies on them and sends them a bigger energy bill,” he said.

A DESNZ spokesman said claims of “big brother overreach” were “misleading”, and that the bill did not change people’s privacy rights.

“The measure in the Energy Independence Bill is supported by industry and will help us target future support to households who need it the most,” he said.