VAT on Energy Supply
So Energy is a domestic only supplier. Domestic energy is taxed at 5% VAT, so this is the rate you’ll see included in our tariffs.
Energy used for business purposes may be charged at a higher rate of 20% VAT. There are some exceptions for small businesses.
Firstly, any property with ‘low’ usage (less than 12,045kWh of electricity or 52,764kWh of gas per year) will be subject to the domestic rate of 5% VAT.
For ‘higher’ use households, as long as 60% or more of the energy used is for domestic purposes, your property will also be subject to the domestic rate of 5% VAT.
For most ‘higher’ use household where more than 60% of the energy used is for business purposes, 20% VAT should be applied to the business energy used, and 5% VAT applied to the domestic energy used.
So, if you run a small business from home, 5% VAT will usually be applied to all the energy supplied. However, if your home business is an energy guzzler, you should usually be paying business VAT for your business energy. For more information please see the HMRC guidance.
So Energy has a duty to investigate ‘higher’ use households which may need to pay business VAT. If you wish to apply for an exemption, please download and complete our VAT declaration form (PDF) and email it to us at email@example.com. Please complete one declaration form per fuel.
Last updated: Wed, 25 Mar, 2020 at 1:51 PM
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