British Gas (BG) possible VAT evasion on Warm Homes Discount (WHD)

Tamarisk2000

BG show WHD £140.00 against the Electricity or Gas portion of your billing unlike other companies like EonNext & Octopus Energy who show it as an incoming receipt at the end of the bill.

What happens is that BG show the before VAT figure as £133.34 CR then go on to calculate the VAT @ 5% on the value of Gas or Electricity used minus £6.67CR on the WHD.

Now don't get me wrong here as the bottom line for the their customers is NEUTRAL. The issue here is are BG claiming £6.67 in VAT on their returns from every WHD in VAT from HMRC.  That would be a lot of money if this is happening and over how many years.

My view is that the sum of £140.00CR for WHD should be shown as a receipt on your billing as do the payments you make to them and not as a deduction against a service provided, its just confusing for customers to understand and misleading.

I did call HMRC and after explaining what I thought they advised that it would be for a different independant department call COMPLIANCE to investigate this matter if/when they carried out any checks but would pass on my comments.

Curiousgirl1

Think you have far to much time on your hands, you need a hobby, unless that hobby is trying to bring down British Gas of course. 

As long as the customer gets £140 off their bill, which they do, who cares how it’s done

MWT

Tamarisk2000 said:

VAT on WHD is EXEMPT from VAT

Have you got a reference for that?

I'm seeing it stated that the £140 discount is inc. VAT, so the only difference is that the BG treatment applies the discount ex-VAT so the VAT on the customer bill is correct in total, the other treatments just show one side of the VAT calculation with the £140 payment to the customer causing a VAT reclaim for the missing £6.67 on the suppliers VAT return...

No difference in total to either the amount the customer pays or the net VAT declared.

PennineAcute

EON Next also add WHD at pre VAT.  This method is only confusing for people who cannot divide by 1.05. 

Tamarisk2000

Curiousgirl1 said:

Think you have far to much time on your hands, you need a hobby, unless that hobby is trying to bring down British Gas of course. 

As long as the customer gets £140 off their bill, which they do, who cares how it’s done

I have a hobby thanks

Nannytone

Scottish Power at the Warm Home Discount on pre VAT too

MWT

Doesn't really matter which way it is done, both result in the same amount of VAT being paid, and the same amount reducing the customer's bill.