VAT on energy living above a pub

Jcowap_2 · 4 October 2018 at 1:55PM

Hello

Query on a landlord that lives above a pub. The gas and electric for the accommodation run off the same gas and electricity meters. There are no separate meters for the pub and accommodation. Currently paying 20% VAT on the gas and electricity. Have been advised that this should be split 80/20 with the 20 split paying 5%. Have also been told of an instance where Eon backdated the VAT and provided a rebate. Current supplier has said they cant do it as the domestic usage would need to be at least 60%.

I cant find any guidance anywhere in relation to this.

Can anybody assist please?

Thanks

00ec25 · 4 October 2018 at 2:11PM

Qualifying use means residential use, not business use. The 60% threshold comes directly from the VAT regs:
https://www.gov.uk/guidance/vat-on-fuel-and-power-notice-70119

3.4 Mixed use
If you supply fuel or power to premises that is partly for qualifying use (see paragraph 3.1) and partly for non-qualifying use, you should charge your customer VAT at the relevant rate on the supplies you make.

If 60% or more of the fuel or power is for qualifying use, you should treat the whole supply as for qualifying use and charge tax at the reduced rate.

If less than 60% of the fuel or power is for qualifying use, you should charge VAT:
at the reduced rate on that portion which is for qualifying use
at the standard rate on that portion which is for non-qualifying use

I have no idea what rules determine how to apportion single meter supplies so can't answer the main point of your question. Can you substantiate your 80/20 split? If you can, then see if your supplier will accept it and charge 5% on your 20%.
The fact that your overall bill is above the de minimis limit suggests your commercial use is heavy and so 80/20 might be reasonable

Jcowap_2 · 4 October 2018 at 2:44PM

I have no idea what rules determine how to apportion single meter supplies so can't answer the main point of your question. Can you substantiate your 80/20 split? If you can, then see if your supplier will accept it and charge 5% on your 20%.
The fact that your overall bill is above the de minimis limit suggests your commercial use is heavy and so 80/20 might be reasonable[/QUOTE]

Maybe rule of thumb is an 80/20 split across all shared meters?

I have now seen another bill from British Gas and it has 2 lots of VAT calculated. One at 20% and another at 5% so so now firmly believe this to be standard procedure.

VAT on energy living above a pub

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