VAT is normally charged at 20% on business energy. However, in certain circumstances a business energy customer can qualify for a reduced VAT rating and only needs to pay the domestic rate of 5%.
Business customers who use less than 1,000 kWh of electricity per month, or less than 4,397 kWh gas per month will automatically get charged at 5%.
For more information on VAT applicable to energy supplies, please contact the HMRC VAT helpline on 0845 010 9000 or visit the HMRC website, where VAT Notice 701/19 covering Fuel & Power can be found.
If your business does qualify for a reduced VAT rate, fill in our VAT declaration form and email it to us and we’ll make sure the reduced rate is applied to your bill.