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Reselling burning oil to domestic household - is it 5% VAT

Farmer paid for delivery of heating oil & it was shared between two properties.  Farmer now wants to send a bill to the other householder for his share of the kerosene - is he to charge vat at 20% or 5% please?

Many thanks in anticipation.


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28th Feb 2012 17:50

2 supplies?

Jane.  Are you saying that the  big kerosene lorry turned and delivered it all to the farmer, who then carried it in buckets over to his neighbour?

Or did the big kerosene lorry turn up and make two deliveries of kerosene? one to the farmer and one to his neighbour?

In the former case, subject to quantities, I agree that you've made an onward supply that is lower-rated.  I suspect though that the latter case applies and that there have, in fact, been two supplies, covered by one invoice.

That being the case, you have no VAT to charge, you simply cannot recover VAT on the part of the invoice relating to the neighbour's delivery and he should reimburse the farmer gross of the VAT he cannot recover..

It may well be better to ask the kerosene supplier to issue a credit note and reinvoice the two separate supplies that have been made.  They may charge more (possibly on both supplies), but overall the result may be better.

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