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Energy Invoices

Hi

We have an invoice for gas and electric that we need to recharge 50% to another company who share our office space. As gas and electric are charged to us with 5% vat, what VAT should we put on our recharge invoice? I think it should be that standard 20% but my manager disagrees.

Any help is much appreciated.

Thanks

John

Replies

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Why are you only paying 5%

5% VAT on fuel only applies to domestic homes or things like care homes. Are you a domestic property?

 

 

 

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Hi Glennzy

 

No, we are a commercial property (waste recycling plant).

 

Thanks

John

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In that case I would

Say that the VAT rate should follow the supply.

if your charged 5% thats the rate you should re charge it at.

Still not sure how you only pay 5% though is this an error or do you get some sort

of concession for waste recycling ?

 

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I think we should be getting charged at 20%. I will consult my manager and possible call the supplier.

 

There should be no concession.

 

Thanks for your help.

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Although it is referred to as "domestic rate" it is defined by the supplied quantity.

The VAT rate can therefore be 5% in summer months and 20% with heavier usage in winter.

 

 

 

 

 

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You are supplying the office space not the gas and electric (unless you've got a side line as a power station and an oil rig). You should charge 20% on your invoice.

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20%
As you are the supplier and are VAT registered, you should charge this back at the standard rate of 20%.

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We rent out

part of our office and whilst we only pay 5% VAT (low usage rate) we recharge our tenant at 20%. I hope we're not wrong!

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I'm sure that others will back me up and or correct me if I am wrong, but as you are the supplier of services and are charging this out, then being VAT registered, you have to chagre this at 20%. The payment of the Energy Invoice is totally separate to the chargeback that you are raising.

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VAT notice 742 extract

11.7.6 Electricity, lighting and heating
If you make a separate charge for un-metered supplies of gas and electricity used by tenants, it should be treated as further payment for the main supply of
accommodation. However, where you operate a secondary meter, the charges to the tenants for the gas and electricity they use are consideration for separate supplies of fuel and power. These supplies will be standard-rated unless the fuel supplied is of a de-minimis quantity, in which case the supply will be subject to the reduced rate.

See
Notice 701/19 Fuel and Power for more information.

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Thanks all for your replies. I thought it should be standard rated and your comments have confirmed it; no de minimis applicable (machines running all day 7 days a week quickly consume the electric!)

Thanks again
John

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