Is VAT on energy supplies only on usage amount

double_dutchy

This government is making more on the Vat by OVO not reducing my bill before VAT is added

.....but the point I'm trying to make is that the £66/67 payments don't affect how much VAT you pay, regardless of how the payment is made. If your monthly usage is £200, for example then you would normally pay 5% VAT on that. i.e. £10. You will still pay £10 VAT for £200 usage whether £66 is taken off your bill or the £66 is paid to your bank.

Octopus, for example, still charge £10 VAT on £200 usage and then they deduct £66

BBSpringer

My concern is that i'm paying extra VAT charges per annum which is making a difference to me, I'm having to pay VAT on £122 which comes to approx £6.10 pm where as my usuage is no more than £70, so if I paid VAT on my usage I would only be paying £3.50pm  Add this up over a 12 month period and i'm almost £30 a year 

MikeJXE

double_dutchy said:

This government is making more on the Vat by OVO not reducing my bill before VAT is added

.....but the point I'm trying to make is that the £66/67 payments don't affect how much VAT you pay, regardless of how the payment is made. If your monthly usage is £200, for example then you would normally pay 5% VAT on that. i.e. £10. You will still pay £10 VAT for £200 usage whether £66 is taken off your bill or the £66 is paid to your bank.

Octopus, for example, still charge £10 VAT on £200 usage and then they deduct £66

I don't see that. If the bill is £200 they will charge £10 = I pay £210 less the banked £66 = £144 if the £66 was deducted the bill would be £134 plus vat = £140.70 a difference of £3.30 in the governments favour. the £66 is a discount on the energy not on the energy that has had vat added. If I buy an item from a shop that says 10% discount the discount is taken off before the vat is added. if thats not the case we are being ripped off. 

timjim

The £66 is a contribution towards your payment not a reduction of your bill. Vat has always been charged on the standing charges + unit costs. There is no conspiracy to rip you off

PennineAcute

BBSpringer said:

My concern is that i'm paying extra VAT charges per annum which is making a difference to me, I'm having to pay VAT on £122 which comes to approx £6.10 pm where as my usuage is no more than £70, so if I paid VAT on my usage I would only be paying £3.50pm  Add this up over a 12 month period and i'm almost £30 a year 

As an example

You pay £200 a month over 12 months - this is £2400

You actually use £2000 over 12 months - you get £400 back.

You have not paid extra VAT.

stewie_griffin

MikeJXE said:

double_dutchy said:

This government is making more on the Vat by OVO not reducing my bill before VAT is added

.....but the point I'm trying to make is that the £66/67 payments don't affect how much VAT you pay, regardless of how the payment is made. If your monthly usage is £200, for example then you would normally pay 5% VAT on that. i.e. £10. You will still pay £10 VAT for £200 usage whether £66 is taken off your bill or the £66 is paid to your bank.

Octopus, for example, still charge £10 VAT on £200 usage and then they deduct £66

I don't see that. If the bill is £200 they will charge £10 = I pay £210 less the banked £66 = £144 if the £66 was deducted the bill would be £134 plus vat = £140.70 a difference of £3.30 in the governments favour. the £66 is a discount on the energy not on the energy that has had vat added. If I buy an item from a shop that says 10% discount the discount is taken off before the vat is added. if thats not the case we are being ripped off. 

The £66/67 is a payment not a discount, so it’s deducted after VAT is added.

double_dutchy

MikeJXE,

Are you arguing that you pay more VAT because of the way OVO pays you the £66/67 payments (in comparison with other suppliers) or are you just saying that it shouldn't work that way at all?

If it's the former then you are wrong - I will pay as much VAT as you for the same usage despite the fact my supplier deducts the payment from my bill.

If it's the latter then you are free to argue that point.......but as the government is giving you £400 then surely it would seem fair to let them decide the rules around that?

EssexHebridean

RobM99 said:

Why is UW "a mistake"?

If you are with them, and ever have cause to contact their customer service, you’ll almost certainly find out… 😆

MikeJXE

double_dutchy said:

MikeJXE,

Are you arguing that you pay more VAT because of the way OVO pays you the £66/67 payments (in comparison with other suppliers) or are you just saying that it shouldn't work that way at all?

If it's the former then you are wrong - I will pay as much VAT as you for the same usage despite the fact my supplier deducts the payment from my bill.

If it's the latter then you are free to argue that point.......but as the government is giving you £400 then surely it would seem fair to let them decide the rules around that?

Lol Yep sure would, thank you my government for giving me £400 less vat. Well done. Why don't they speak the truth instead of hiding the detail ? 

[Deleted User]

MikeJXE said:

double_dutchy said:

MikeJXE,

Are you arguing that you pay more VAT because of the way OVO pays you the £66/67 payments (in comparison with other suppliers) or are you just saying that it shouldn't work that way at all?

If it's the former then you are wrong - I will pay as much VAT as you for the same usage despite the fact my supplier deducts the payment from my bill.

If it's the latter then you are free to argue that point.......but as the government is giving you £400 then surely it would seem fair to let them decide the rules around that?

Lol Yep sure would, thank you my government for giving me £400 less vat. Well done. Why don't they speak the truth instead of hiding the detail ? 

Because, as usual, you have misunderstood the situation.

They are giving you £400.

They are not giving you £400 + VAT.

They are also not giving you £400 - VAT.

They are giving you £400.