British Gas - Double Charging VAT on Credit from People's Energy

moliver27

I was in £334.13 credit with People's Energy when they went bust in November.  I had the credit applied to my British Gas account on 7th February but the figure has suddenly become £318.22.  When I queried this with British Gas they said it was because they had applied the 5% VAT to the credit.  Surely they cannot apply VAT to credit as the VAT will then be applied to the energy usage and essentially applied twice.  When I queried this with them they agreed and adjusted the credit back to £334.13.  I wanted to post this here to make people aware that British Gas could be erroneously charging them VAT twice for credit from other providers who have recently gone bankrupt.

MWT

It more likely is down to the way they format their bills and the point where they display the credit.

If they are deducting it from the pre-VAT charges then yes, they should reduce it to the lower ex-VAT figure.

If they deduct it from the inc. VAT total then they would not reduce it.

It still ends up the same either way.

Say you had used £400 (including VAT) then your £334.13 credit leaves you with £65.87 to pay.

The way BG present it, excluding VAT, that would be £380.95 less £318.22 leaving £62.73 +VAT to pay which equals £65.87.

So no difference.