Energy charges

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  • #164917
    Trevor Haylett
    Participant
    (1013)

    Our electricity supplier says that if the monthly usage for one of our meters is more than 1000 kW then they can charge 20% vat on that meter. Is that correct do you know? I understood that charities should only pay 5% vat. Our gas supplier has also continued to charge us for CCL (Climate Charge Levy) when I thought that no longer applied to charities. Am I right and they are wrong?

    #164925
    clerk.stjohnswilton
    Participant
    ()

    Trevor

    They could well be right,.if you’re using over 1,000 kilowatt hours of electricity a month.

    https://www.gov.uk/vat-charities/what-qualifies-for-relief says:

    ‘Charities pay VAT on all standard-rated goods and services they buy from VAT-registered businesses.

    They pay VAT at a reduced rate (5%) or the ‘zero rate’ on some goods and services.

    What qualifies for the reduced rate?

    Your charity pays 5% VAT on fuel and power if they’re for:

    + residential accommodation (for example, a children’s home or care home for the elderly)

    + charitable non-business activities (for example, free daycare for disabled people)

    + small-scale use (up to 1,000 kilowatt hours of electricity a month or a delivery of 2,300 litres of gas oil)

    If less than 60% of the fuel and power is for something that qualifies, you’ll pay the reduced rate of VAT on the qualifying part and the standard rate (20%) on the rest.’

    On the other hand, you’re right that you are exempt from the CCL if you are a charity.

    https://www.businessenergydeals.co.uk/blog/climate-change-levy/#:~:text=directly%20to%20HMRC.-,Exemptions%20for%20the%20Climate%20Change%20Levy,charities.
    says:

    ‘Three main exemptions exist from paying the Climate Change Levy on commercial gas and business electricity prices: domestic customers; small businesses; and. charities’

    Nick Stiven
    clerk@stjohnswilton.org.uk

    #164929
    thesmac
    Participant
    (769)

    What is the heating for? If it is just dwellings, it should be only 5% VAT, there is no discussion about this. Our (former) supplier switched us to 20% and CCL but he isn’t legally allowed as the boiler is for the resident flats so they had to refund us. They were reluctant but the law was on our side.

    #165165
    Trevor Haylett
    Participant
    (1013)

    Thanks for those replies. In response to “thesmac” it’s not a heating charge but an electricity charge so it’s for usage other than heating but I’ll certainly chase up the illegal CCL charge. Thanks again

    #165209
    thesmac
    Participant
    (769)

    If it is for dwellings, both heating and electricity charges should be at 5%.

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