Calculation of Direct Debit

Descrabled

I record our meter readings at least monthly and have spreadsheet records going back to when we moved house a decade ago.  I know how many kWh are used for gas and electric over the year  I can approximate to how much our consumption will be and hence the cost going forward; even allowing for estimates of rate increases from October and the electricity rebate (£66.67 per month).

Unfortunately the problem I always encounter is "does the daily and kWh rates include VAT at 5%?". I look at the tariff in our online account and it never states if the rates are VAT inclusive.

We used to receive a bill every month from our suppliers, in the good old days, before the SOLR process that we endured.  Now we receive bills every 6 months from our two suppliers.

I am trying to forecast how much our accounts will be in credit or debit over the next 10 months to April 2023.  I can then discuss, on an informed basis, the amount of the direct debit.

I notice that the two utility companies involved do not try to explain how they arrive at their calculation of the direct debit, only stating it needs to be £x each month.

I've just had several days discussion with one company's representatives, that wanted to more than triple the direct debit notwithstanding a £400 credit, and had to resort to the magic word "complaint" before they would defer to my proposed figure.

In summary, why don't utility companies quote whether the rates in their tariffs include VAT?  Why don't they properly explain how they arrive at the monthly direct debit amount?

Robin9

What are the two suppliers ?

QrizB

Descrabled said:

In summary, why don't utility companies quote whether the rates in their tariffs include VAT?

Most do.

Why don't they properly explain how they arrive at the monthly direct debit amount?

Most do.

If you could name your current suppliers, we'll be able to provide more help.

Descrabled

Two Suppliers are of course.

Electricity from the gas company of Britain.

Gas from the electricity company of France.

Robin9

Descrabled said:

Two Suppliers are of course.

Electricity from the gas company of Britain.

Gas from the electricity company of France.

You can name them##

I assume BG  and EDF

Brie

The blather I've understood from suppliers was that they ignore the credit, calculate your usage assuming you will be increasing it rather than decreasing (so add 10+% although one admitted only using the months of Dec to Feb as their basis) and then using the highest rate you will have in the next 12 months (finger in the air for some increases) decide how much you will pay over 12 months, divide by 9 or 10 to ensure that you are always a way ahead.  They will then increase that amount if, with the current credit, you are not at least 2 months in credit based on their large DD estimate.

It would be nice if there was an industry standard that everyone had to stick to that meant we didn't have to constantly be lodging complaints to get a fair payment in place.

I'm currently waiting to see if my DDs go down due to our massive decrease in use due to MiL being in hospital and not needing all the lights on and the heat  dialed up to 11 all day, year round.

Descrabled

British Gas is in other words the gas company from Britain that supplies our electricity

EDF is literally Electricity of France that supplies our natural gas.

My attempt at a pun; sorry.

Robin9

EDF   includes VAT

How we worked out your estimates

Gas

 

Your estimated annual gas use ?

13,886kWhYour estimated annual gas use is 13,886 kilowatt hours.

 

x
To work out the cost of this energy, we multiplied it by the tariff's unit rates.Unit rate ?

7.367pGas unit rate: 7.367 pence

 

+
Daily standing charge We then added your daily standing charges for the year.?

365 days at 27.22pGas standing charge: 27.22 pence per day

 

=
Your estimated annual gas cost This calculation tells us your estimated annual gas cost is Your estimated annual gas cost?

£1,122.29

Current tariff

End date

None

Unit rate

Gas: 7.367p per kWhGas unit rate: 7.367 pence per kilowatt hour

Daily standing charge

Gas: 27.22p per day

wild666

If they rates do not include 5% VAT then add the 5% after working out the monthly bill. If the prices include the 5% VAT then it's just a matter of working out the kWh, assuming you don't have smart meters, and adding the figures together to generate your monthly usage.
With smart meters only the gas usage needs converting to kWh, use 11.3 kWh as the figure and you will be close to the usage. 

Use a figure from 12 months ago, to make sure your not underestimating the usage you could use the present rates as this would certainly mean an overestimation then deduct about £180 from the total to adjust for before the present increases.

Whatever figures you use try and use the present rates, from April, for estimating future usage to October and beyond. 

matelodave

Generally any advertising bumpf will have the VAT included in the pricing. Bills usually have the unit rate and standing charge shown before VAT and the VAT added at the end of the bill.

What appears on your account might include VAT and might not. I'm with Eon-Next and it explicitly states that my tariff and S/C include VAT at 5% although the actual bills/statements have it broken down as unit rate plus VAT.

TBH 5% VAT on a £1000 is only £50 so really only makes a £4 a month difference one way or another. Is it worth losing sleep over?

I've never had a problem with defining my DD - I tell them how much I reckon I'll use (based on 12 years worth of records, they suggest a DD which is usually what I calculated myself within a pound or two. If like SSE ,they start faffing around with it during the year then I make them change it back. I keep a monthly running total to ensure that my consumption is tracking my estimate and I'm seldom more than £20-£30 off target by the end of the 12 month period..

The only thing that's mucked it up was companies going bust halfway through which sometimes ended with a credit or debit which had to be sorted out.

My account with Eon-Next did get to around £250  in debit at the end of March but that's being whittled away now summer is here. It's presently £86 in debit but will get knocked down by about £40 next month and should hopefully balance by August with the aim of going into  a small amount of credit ready for the winter although I suspect it'll need some revision upwards when the new cap gets applied in October. 

As we use around 70% of our energy in the five months between November and March my account is usually in debit for most of the year but it gets sorted out in the seven summer months and always just about balance out after 12 months.

Descrabled

British Gas does include, in a footnote, that it includes VAT. I stand corrected, although why they can't state "unit rates including VAT.

I have just entered our online account for EDF and it does not specify that the unit rates include VAT.

However, all quotations to members of the public must always include VAT.  Quotations to compaies usually exclude VAT.