VAT

Do I need to pay VAT on business gas & electricity?

Unless we are otherwise informed, VAT will be applied to your business energy invoice at the current standard rate of 20%. However, your organisation may be eligible for a reduced VAT rate.

VAT reductions for business energy

There are a number of scenarios in which your business may be eligible for VAT reductions on your business energy bill:

  • If your business meets the ‘De minimis’ requirements
  • Where an electricity or gas supply is used wholly or partly for domestic or charitable non business use, or ‘qualifying use’

‘De Minimis’ customers

If your average daily consumption of energy is lower than the ‘de minimis’ threshold, then you are eligible to be billed at 5% VAT on your gas and electricity bills. Your average daily usage must be no more than:

  • 33kWh (1000 kWh per month) of business electricity
  • 5 therms or 145 kWh (150 therms/4397 kWh per month) of business gas

‘Qualifying use’ customers

In instances where a property consumes energy for domestic or charity use as well as commercial, usage for this part of the supply will qualify for the reduced rate of VAT (5%).

Customers with qualifying use must submit separate customer declaration forms highlighting the usage figures for each supply purpose, so that we can determine what percentage of the bill is eligible for the VAT reduction.

If you are eligible for a reduced VAT rate, you must send us a fully completed VAT Declaration Certificate in advance of your first invoice to ensure the reduction is applied. 

Further information

To find out if you are eligible for reduced rates please read our VAT and CCL guidance notes

Alternatively, for further information regarding VAT, contact our energy advisors on:

Email: enquiries@gazprom-energy.com

Fax: 0845 230 0022

Post: Gazprom Energy, 27 Quay Street, Manchester, M3 3GY

Or look up the HMRC advice centre or website: http://www.hmrc.gov.uk/or HMRC National Advice Centre 0845 010 9000