VAT on fuel bills

ianpenman268

I’m with Utility Warehouse for gas and electricity, I’ve been looking at my bills and thought I’d do a quick check on the VAT, I’m being charged VAT on my monthly payment to them not on the energy used, I’ve paid approximately £100 vat in the last 9 months I’ve been with them, however, the last 9 months usage total costs the VAT should only be £70! Is this correct, doesn’t seem right to me!

MultiFuelBurner

If you believe you are being charged over the 5% rate for domestic tariffs then raise a complaint.

MeteredOut

Can you post specific figures - unit rates, kWh usage during those 9 months, and bill figures (not DD payments) for that usage. It'd be extremely unlikely that such an issue would exist for 1 customer, and if it was widespread, we'd see more posts about it.

QrizB

ianpenman268 said:

Is this correct, doesn’t seem right to me!

Yes it's correct.

Later in the year when you're using £350 worth of energy during the month you'll still only pay VAT on your £220 payment.

ianpenman268

MeteredOut said:

Can you post specific figures - unit rates, kWh usage during those 9 months, and bill figures (not DD payments) for that usage. It'd be extremely unlikely that such an issue would exist for 1 customer, and if it was widespread, we'd see more posts about it.

My point is, surely we should be paying vat on Energy used and not on the monthly budget payment, I’m already £590 in credit but payed vat on all that as opposed to the energy used!

QrizB

ianpenman268 said:

MeteredOut said:

Can you post specific figures - unit rates, kWh usage during those 9 months, and bill figures (not DD payments) for that usage. It'd be extremely unlikely that such an issue would exist for 1 customer, and if it was widespread, we'd see more posts about it.

My point is, surely we should be paying vat on Energy used and not on the monthly budget payment, I’m already £590 in credit but payed vat on all that as opposed to the energy used!

No, that isn't how it works.
If you were to leave UW tomorrow you'd be refunded that £590 and the VAT you've previously paid on it.

MeteredOut

ianpenman268 said:

MeteredOut said:

Can you post specific figures - unit rates, kWh usage during those 9 months, and bill figures (not DD payments) for that usage. It'd be extremely unlikely that such an issue would exist for 1 customer, and if it was widespread, we'd see more posts about it.

My point is, surely we should be paying vat on Energy used and not on the monthly budget payment, I’m already £590 in credit but payed vat on all that as opposed to the energy used!

Imagine how complicated a bill would be for customers if the VAT was not based on their DD amount, but on their (what might be estimated) usage.

I'm not exactly sure what you're concerned about. If you want your VAT paid to be closer to actual usage VAT, then come off a DD tariff and onto a PAYG one.

Scot_39

ianpenman268 said:

MeteredOut said:

Can you post specific figures - unit rates, kWh usage during those 9 months, and bill figures (not DD payments) for that usage. It'd be extremely unlikely that such an issue would exist for 1 customer, and if it was widespread, we'd see more posts about it.

My point is, surely we should be paying vat on Energy used and not on the monthly budget payment, I’m already £590 in credit but payed vat on all that as opposed to the energy used!

That sound more of a feature with the operation of annualised DD - only potentially a problem with the level of DD payment set - and not per se the small 5% VAT component within it.

As with only nine months out of 12 - assuming thats the DD calc cycle your on  - so starting in Dec/ Jan ? - you arguably didn't run through a full winter season yet in the current 12 month year - so might expect some credit.  

But then over 2xDD - nearer 3 in fact -  is perhaps a little excessive too.

Yes the credit would be lower without the VAT - but you will be refunded any overpayment - including the 5% VAT on it - when you reclaim credit - or not pay as much VAT on acutal energy used - when using more than your annualised payment in winter / or next year when DD review figure offset by that credit.

Try asking for a refund of the credit - but going into winter unlikely to get it all back with many suppliers.

If it still annoyes you

And IF you can tolerate variable summer / winter billing levels (based on 5%=£100 maybe c£220 - so maybe actuall use sub £100 summer, £300+ winter ?)

Do UW do monthly variable direct debit ?

If so switch to it - and they will either refund or run that credit down before taking another penny.

Or switch to a supplier who will.

OR if not - and wed to UW (e..g for cross selling discounts - if they still do that) - at a push smart prepay might suit you better - and is much closer to DD rates anyway.

[Deleted User]

MeteredOut said:

ianpenman268 said:

MeteredOut said:

Can you post specific figures - unit rates, kWh usage during those 9 months, and bill figures (not DD payments) for that usage. It'd be extremely unlikely that such an issue would exist for 1 customer, and if it was widespread, we'd see more posts about it.

My point is, surely we should be paying vat on Energy used and not on the monthly budget payment, I’m already £590 in credit but payed vat on all that as opposed to the energy used!

Imagine how complicated a bill would be for customers if the VAT was not based on their DD amount, but on their (what might be estimated) usage.

I'm not exactly sure what you're concerned about. If you want your VAT paid to be closer to actual usage VAT, then come off a DD tariff and onto a PAYG one.

In my experience VAT is never added to payments on account. My DD monthly payment is just added to my existing debit/credit balance. The only VAT that is applied to an energy bill is 5% on the charges (units used and daily standing charge). These charges (based on estimated or actual readings) are then deducted from my credit balance.

QrizB

[Deleted User] said:

MeteredOut said:

ianpenman268 said:

MeteredOut said:

Can you post specific figures - unit rates, kWh usage during those 9 months, and bill figures (not DD payments) for that usage. It'd be extremely unlikely that such an issue would exist for 1 customer, and if it was widespread, we'd see more posts about it.

My point is, surely we should be paying vat on Energy used and not on the monthly budget payment, I’m already £590 in credit but payed vat on all that as opposed to the energy used!

Imagine how complicated a bill would be for customers if the VAT was not based on their DD amount, but on their (what might be estimated) usage.

I'm not exactly sure what you're concerned about. If you want your VAT paid to be closer to actual usage VAT, then come off a DD tariff and onto a PAYG one.

In my experience VAT is never added to payments on account.

That's not how UW work, however.

We've had UW VAT queries before. While it's a bit odd, it balances.

born_again

[Deleted User] said:

In my experience VAT is never added to payments on account. My DD monthly payment is just added to my existing debit/credit balance. The only VAT that is applied to an energy bill is 5% on the charges (units used and daily standing charge). These charges (based on estimated or actual readings) are then deducted from my credit balance.

My experience as well, with more energy co than I car to remember.
Look at the bill. Mine only ever lists VAT on energy used. Never on payments.

If that is the way that UW are billing. Then time for a complaint.