Octopus VAT

Hifivepro

Hi, I have just been checking my energy bills, and whilst confirming the new rates with the Octopus helpline, I came across a discrepancy in the VAT rate. The rate shown on all the bills is 5%, but when you look on the Octopus website, it's 4.76%. When I challenged the Octopus adviser, he said that they round it up to 5%.
My question is, can they do this?

Hoenir

5% is the official rate of VAT. This is what they must charge and pay over to the HMRC. 

maisie_cat

Most tariffs are displayed including VAT, and the VAT element is 4.76% of the gross or 5% of the nett.

So if the bill is £105 gross the vat is £5 or 4.76% of £105. If the bill is £100 plus VAT of 5% the VAT is £5 and the total is £105
Simply another way of putting the same thing as most prices aimed at consumers are VAT inclusive and many aimed at businesses are VAT exclusive

BarelySentientAI

Hifivepro said:

Hi, I have just been checking my energy bills, and whilst confirming the new rates with the Octopus helpline, I came across a discrepancy in the VAT rate. The rate shown on all the bills is 5%, but when you look on the Octopus website, it's 4.76%. When I challenged the Octopus adviser, he said that they round it up to 5%.
My question is, can they do this?

That's a terrible explanation by the adviser. 

maisie_cat is correct, it's just a result of which way the calculation is done.

Hoenir

BarelySentientAI said:

Hifivepro said:

Hi, I have just been checking my energy bills, and whilst confirming the new rates with the Octopus helpline, I came across a discrepancy in the VAT rate. The rate shown on all the bills is 5%, but when you look on the Octopus website, it's 4.76%. When I challenged the Octopus adviser, he said that they round it up to 5%.
My question is, can they do this?

That's a terrible explanation by the adviser. 

maisie_cat is correct, it's just a result of which way the calculation is done.

Standard of mathematics in the UK is extremely poor these days. No great surprise.