Vat on electricity bill

[Grassland man]

Our electricity bill has been, for a number of years, split 70% farm and 30% domestic. We pay 20% vat on the farm electric and have paid 5% on the domestic part. We received a bill this morning from british gas for just over 2k as they say we should have paid 20% vat on the domestic part of our bill over the last 4 years. Is this correct? Has anyone else experienced this?

 

[neilo]

I would guess it’s arbitrary where the threshold is between the 2 different VAT rates.
My leccy, over 2 meters, comes on one monthly bill (Opus). If the monthly figure is over £300 (iirc) then VAT is levied on the lot at 20%, if it’s below that figure the whole lot has VAT levied at 5%.

It’s then down to me to allocate between private & business usage.

 

[Exfarmer]

Our electricity bill has been, for a number of years, split 70% farm and 30% domestic. We pay 20% vat on the farm electric and have paid 5% on the domestic part. We received a bill this morning from british gas for just over 2k as they say we should have paid 20% vat on the domestic part of our bill over the last 4 years. Is this correct? Has anyone else experienced this?

Domestic electric is 5%

 

[Rich_ard]

Our electricity bill has been, for a number of years, split 70% farm and 30% domestic. We pay 20% vat on the farm electric and have paid 5% on the domestic part. We received a bill this morning from british gas for just over 2k as they say we should have paid 20% vat on the domestic part of our bill over the last 4 years. Is this correct? Has anyone else experienced this?

Are you vat registered?

 

[Grassland man]

Are you vat registered?

Yes. Always claim the farm proportion. But don't claim any part of the private usage.

 

[Simon Chiles]

Our electricity bill has been, for a number of years, split 70% farm and 30% domestic. We pay 20% vat on the farm electric and have paid 5% on the domestic part. We received a bill this morning from british gas for just over 2k as they say we should have paid 20% vat on the domestic part of our bill over the last 4 years. Is this correct? Has anyone else experienced this?

I’d email them back saying that you’ll check this out with the VAT office and I would. In the past I’ve found the vat helpline very helpful and apart from anything else you’ll be for warning them that you’re about to make reclaim. I suspect the vat people will take a dim view of them not accounting for vat correctly.

 

[Jsmith2211]

I’d email them back saying that you’ll check this out with the VAT office and I would. In the past I’ve found the vat helpline very helpful and apart from anything else you’ll be for warning them that you’re about to make reclaim. I suspect the vat people will take a dim view of them not accounting for vat correctly.

Which VAT helpline are you ringing? Not the same one as i've tried to use that doesn't have any people on the end... Tried for two weeks to get hold of someone in the end had to go through various ways and means and email someone quite high up to get a response out of them!

 

[Rich_ard]

Yes. Always claim the farm proportion. But don't claim any part of the private usage.

You will be able to claim it back then. Be interesting to see how they do it! Can't see the reasoning though. They will hand it over and you claim it back.

 

[Bald n Grumpy]

Have you got separate meters for business and domestic?

 

[Bald n Grumpy]

You will be able to claim it back then. Be interesting to see how they do it! Can't see the reasoning though. They will hand it over and you claim it back.

You can't claim all vat back on domestic only a proportion for use of home.

 

[Rich_ard]

You can't claim all vat back on domestic only a proportion for use of home.

He said its 20% rate the domestic which he doesn't claim back was 5%

 

[Grassland man]

Have you got separate meters for business and domestic?

No. It goes through 1 meter.

 

[Bald n Grumpy]

No. It goes through 1 meter.

Are you on a business or domestic tariff ?

 

[Grassland man]

Are you on a business or domestic tariff ?

We are on a business tariff.

 

[Bullring]

No. It goes through 1 meter.

I have 2 meters, one for the house and one for the yard, they were all charged at 20% because I used over their 5% threshold, after years of arguing the one was purely domestic I had to fill in a self declaration form and it’s now back to 5% and credited for 5 years worth of 20% vat. if your only on 1 meter I expect you have gone over their 5% limit for units used so automatically you get bumped up to 20% vat, I’m sure it’s around 3000 units per quarter before you get charged 20%. There is also not climate change levy on domestic use.

 

[Bald n Grumpy]

We are on a business tariff.

Think you'll end up having to pay the vat IMO, can't see how you can have two rates through one meter. Don't know what it would cost for a second meter for the domestic use, but you'd probably get a better deal on your household electricity and if it's a farmhouse with a farm office and where you keep your wellies and workwear you can claim about a third against business and a third of vat

 

[Sonoftheheir]

Who splits the VAT out? You or British Gas?

 

[Cowabunga]

if your only on 1 meter I expect you have gone over their 5% limit for units used so automatically you get bumped up to 20% vat, I’m sure it’s around 3000 units per quarter before you get charged 20%. There is also not climate change levy on domestic use.

If there’s only one meter, how would they know? Unless the total use was not much more than the average house uses?

 

[Bullring]

If there’s only one meter, how would they know? Unless the total use was not much more than the average house uses?

Wouldn‘t matter if he had only 1 meter, if he uses less than 3000 units per quarter then it’s 5% vat and if it’s over 3000 units then vat is charged at 20% as it’s not classed as a small business. As far as they’re concerned they don’t know how many units the house used and what the business used. Only way would be to have a seperate meters for both the house and business.

Dont know if British Gas is different but edf set it out as follows

https://www.edfenergy.com/sites/default/files/2024-03/B32_Inline_AW15_Inline_1.pdf

after a brief look seems British Gas is the same.

How do I apply for a VAT reduction? | British Gas business

Most businesses are charged VAT at 20% on business energy, certain businesses pay the domestic rate of 5%. Apply for a reduced VAT rate for your business.

www.britishgas.co.uk

 

[Pottersfarm]

Our electricity bill has been, for a number of years, split 70% farm and 30% domestic. We pay 20% vat on the farm electric and have paid 5% on the domestic part. We received a bill this morning from british gas for just over 2k as they say we should have paid 20% vat on the domestic part of our bill over the last 4 years. Is this correct? Has anyone else experienced this?

20% on the farm supply and farm house supply. 5% on the farm cottages.