Utility warehouse reclaiming vat

nigelharrison

Retired and sold business 2014
Utility warehouse requested 2018 that I should pay vat which while I was there customer they had charged at 5% instead of 20 %
I am not now registered for vat. So cannot reclaim
Has anyone similar experience
Am I legally obliged to reimburse utility warehouse for their error
Thank you in anticipation

Robin9

I had the reverse with UW they had charged 20% (my predecessors error) instead of 5%. They went right back to when they first supplied the charity .

EnergyRookie

nigelharrison wrote: »

Retired and sold business 2014
Utility warehouse requested 2018 that I should pay vat which while I was there customer they had charged at 5% instead of 20 %
I am not now registered for vat. So cannot reclaim
Has anyone similar experience
Am I legally obliged to reimburse utility warehouse for their error
Thank you in anticipation

I'm not registered for VAT either, so cannot reclaim VAT.
If I were registered for VAT, I thought I would only be able to reclaim VAT if the purchase was wholly & exclusively used for business purposes? I' feel sure an accountant will be along and confirm or deny that soon

Whether my understanding about reclaiming VAT is correct or not, I'm pretty sure you can only reclaim vat actually incurred, so it doesn't make much difference what vat % was charged.

PennineAcute

I do believe that backbilling also applies to businesses. If this is so, they cannot backbill you for anything over 12 months ago.

Corr

Hi there, we are in the same position. We were with Utility Warehouse from 2010-2014 in business. As a result of an HMRC investigation into Utility Warehouse it transpired that THEY were not billing businesses the correct VAT rate, an error on their part, and as a result they are trying to recuperate the difference from us. We are no longer in business so cannot recoup from our customers and as far as we are concerned we paid our bills, as they charged us, on time and had final meter readings etc when we closed business, therefore surely it is not our fault that they were not charging us the correct rate! Do we have to pay? Does backbilling apply to business ? Thanks!

Corr

Did you ever get an answer to this? We are in the same position?

Cardew

The same conditions for back-billing on domestic accounts also apply to a 'micro business'.


See https://www.britishgas.co.uk/business/smarter-working/energy-made-simple/micro-businesses/back-billing


The above gives the link to Ofgems rules which states unequivocally:

Our backbilling rules apply to both domestic and microbusiness customers.

FestiveJoy

Corr wrote: »

Hi there, we are in the same position. We were with Utility Warehouse from 2010-2014 in business. As a result of an HMRC investigation into Utility Warehouse it transpired that THEY were not billing businesses the correct VAT rate, an error on their part, and as a result they are trying to recuperate the difference from us. We are no longer in business so cannot recoup from our customers and as far as we are concerned we paid our bills, as they charged us, on time and had final meter readings etc when we closed business, therefore surely it is not our fault that they were not charging us the correct rate! Do we have to pay? Does backbilling apply to business ? Thanks!

Backbillng rules to "micro-businesses" as well as domestic customers as stated above.

But note also that backbilling only prevents a supplier seeking additional payment for unbilled energy used more than 12 months prior to the error being detected and a corrected bill being issued.

When was your bill actually issued? And when did HMRC make their ruling?
It appears HMRC made their ruling around mid 2018 based on this other similar thread
https://forums.moneysavingexpert.com/discussion/5873906

It also appears it is HMRC that is asking the supplier to recover the extra amount on their behalf, and so the supplier was issuing revised bills accordingly at that time.

Not sure what you mean by being unable to recoup from your customers for the extra. As a VAT registered business, it was up to you to charge the correct amount of VAT to your customers. (output tax) and account that to HMRC; it makes no difference what rate you were charged at the time (input tax).

Having said that, if your company no longer exists, HMRC can't get blood out of a stone.