VAT on utilities

VAT on utilities

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Please can you confirm what the VAT rate is on Water, Gas & Electic

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Val
Valerie Dalgleish

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By spidersong
18th Aug 2008 14:15

Water - Zero, Others - Reduced (mainly)
Supplies of water (in the utility sense, rather than as a standard rated beverage) are zero rated by Item 2 of Group 2 to Schedule 8 of the VAT Act 1994. This is unless it's used in a relevant industrial activity (steel works, manufacturing/engineering etc.), or if it's distilled, deionised or heated.

Gas and Electricity will be charged at the reduced rate (Item 1, Group1, SChedule 7A, VAT Act 1994) where they are domestic supplies or fall below certain usage levels [Gas = 150 therms or 4397 Kwh per month, Electicity 1000 Kwh per month].

They can also use the reduced rate where the supply is to a charity building used by a charity other than in futherance of a business.

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