EDF Energy are overbilling VAT - BEWARE!!

MoneyLovesCompany

I'm sure most people check their gas and electric bills carefully but does that also extend to computing the VAT charge? No doubt people believe that a massive company such as EDF has a computer that is capable of multiplying by 5 and dividing the answer by 100 without having to check their figures.

WRONG!!!

One expects a rounding difference of one pence (1p) in the calculation of the 5% VAT charge but EDF have been charging more.

Last April, they charged me VAT at a rate of 5.11%. OK, granted I had been overcharged only 13p, which they have graciously repaid as "Goodwill" but multiply that by several thousands of customers and someone, either the government (HMRC) or EDF are cashing in.

I draw this to readers' attention as yet again I was overcharged this quarter, albeit only 2p. These are not isolated incidents. When I was in school, admittedly it was in the last century, I was taught that one rounded up or down to the next number. EDF are rounding up even higher still.

I urge you all to check your bills for as far back as you have them and demand the repayment of any overcharged VAT. And why not request interest too whilst you're at it?

Is this another government Stealth Tax?

Premier_2

sdestinyp wrote: »

...

Is this another government Stealth Tax?

No, not really.

The government sets the VAT rate and expects bona fide VAT registered companies to collect that correctly. Also, according to the VAT regulations, VAT should always be rounded down to the nearest penny ... but admittedly many suppliers don't abide by this rule.

Edit:
If you have proof of them regularly charging their customers VAT illegitimately (and according to you, you seem to have), report them to the Customs Confidential hotline, 0800 595 000

u109230

I'm with EDF for both gas & electricity. I checked back through my previous 3 quarters worth of paper statements.

Both fuel costs are laid out as per the following actual example;

Fuel charge = £126.64
DD discount = -£4.00
Duel fuel discount = -£6.00
VAT refund = -£0.50
VAT at 5% = 6.32

Total charges = £122.46

It appears that the VAT refund corrects the figure as per the relevant discounts applied, so the sums seem right to me.:o

Bark01

Premier wrote: »

Also, according to the VAT regulations, VAT should always be rounded down to the nearest penny ... but admittedly many suppliers don't abide by this rule.

Have you got a link to anything officail that backs that up?

I've always naturaly rounded VAT.

A quick google only found things that mentioned rounding to the nearest p, I had a look throught the goverments VAT website but couldn't find anything that mentioned rounding.


I can't belive people are angry enough to complain about 30p......

DVardysShadow

Bark01 wrote: »

... I can't belive people are angry enough to complain about 30p......

Across a million customers, you know how much it is. And strangely these errors all tend to be in the same direction. I begin to imagine that the utilities pay people to think of ways of shaving money off people with trivial errors in calculations. There is certainly enough money in it to do that.

Ken68

They'll be stealing Christmas next.

Cardew

u109230 wrote: »

I'm with EDF for both gas & electricity. I checked back through my previous 3 quarters worth of paper statements.

Both fuel costs are laid out as per the following actual example;

Fuel charge = £126.64
DD discount = -£4.00
Duel fuel discount = -£6.00
VAT refund = -£0.50
VAT at 5% = 6.32

Total charges = £122.46

It appears that the VAT refund corrects the figure as per the relevant discounts applied, so the sums seem right to me.:o

That would explain it!!! Although they have rounded VAT down 1.2p

I checked my BG bills and they have a different method.

All discounts are calculated without VAT and deducted from the total bill before VAT is added.

So if my discount was £10.50 only £10 would be deducted from the total bill.

e.g. Electricity used £230 - £10 discount = £220 + £11 VAT = £231 total

Also BG round down to nearest penny.

dogshome

I have just written a letter of complaint to EDF, (Having been with them for only 6 months they advised me that that they wanted to lower my D/D payments because their lunatic software had calculated what my full years consumption would be from the figures on my summer bills.). I also took the opportunity to complain about the billing format, whereby the the fuel cost is totalled and VAT added, then they take off the D/D discount which should by right be subtracted prior to VAT, and deduct yet a further credit for the VAT they have overcharged because they deducted the D/D discount from the wrong place.

u109230

Cardew wrote: »

That would explain it!!! Although they have rounded VAT down 1.2p

I checked my BG bills and they have a different method.

All discounts are calculated without VAT and deducted from the total bill before VAT is added.

So if my discount was £10.50 only £10 would be deducted from the total bill.

e.g. Electricity used £230 - £10 discount = £220 + £11 VAT = £231 total

Also BG round down to nearest penny.

Yeah that's really strange .

I doubled checked back over the last 18 months worth of bills & there's some further (minor) inconsistencies with the VAT calculations. Some are rounded down by as much as 2.1p & others up by 0.75p.

I wonder why they cannot accurately multiply a number by 5%?? :rolleyes:

Premier_2

bark01 wrote: »

have you got a link to anything officail that backs that up? ...

17.5 calculation of vat on invoices – rounding of amounts

...

You may round down the total vat payable on all goods and services shown on a vat invoice to a whole penny. You can ignore any fraction of a penny.

http://customs.hmrc.gov.uk/channelsPortalWebApp/channelsPortalWebApp.portal?_nfpb=true&_pageLabel=pageLibrary_ShowContent&id=HMCE_CL_001543&propertyType=document

Cardew

DVardysShadow wrote: »

Across a million customers, you know how much it is. And strangely these errors all tend to be in the same direction. I begin to imagine that the utilities pay people to think of ways of shaving money off people with trivial errors in calculations. There is certainly enough money in it to do that.

Even if the OP were correct about minor overcharging on VAT(and u109032's post seems to indicate the OP is mistaken) I really cannot see that EDF could possible gain by such errors.

Their accounts are audited and to collect £xx in VAT from their customers and pay HMRC a smaller sum would be a serious criminal offence.

There would have to be criminal deception to hide that discrepancy in the accounts; and it could be checked very easily going back for years.