Pay Less Tax
Did you know not all organisations are liable to pay the standard 20% VAT rate & the Climate Change Levy on their supply of electricity and gas? There are quite a number of businesses who provide “residential accommodation” that are eligible for the reduced 5% VAT rate according to HMRC. These include:-
- Caravan parks.
- Children’s Homes.
- Homes providing care for elderly, disabled, dependency or mental patients.
- Hospices.
- Self catering holiday accommodation.
Additionally, all not-for-profit charities are entitled to pay the reduced 5% VAT rate.
But not many utility suppliers will tell you how to claim this reduction, and this is where we can help you to save those precious pennies. So give us a call at EnergyPriceSaver.com (01524 259 200) and we will do all the hard work for you. Thanks, Jon
EnergyPriceSaver.com – Fresh Juice At A Better Price.
Comments 8
How do I find out if my care home is entitled to reduced rate gas and electric?
Author
Hi Jordan,
Sorry about the slow response. Your comment got lost in all the spam which we receive. Sorry!
All care homes in the UK are entitled to the reduced VAT rate for your gas and electric.
The following businesses should receive the reduced VAT rate:-
– Caravan parks.
– Children’s Homes.
– Homes providing care for elderly, disabled, dependency or mental patients.
– Hospices.
– Self catering holiday accommodation.
– Not-for-profit charities.
Please give us a call on 01524 259 200 and we can help you further,
Jon Mullen
The Energy Evangelist
W: http://www.EnergyPriceSaver.com
M: EnergyEvangelist@EnergyPriceSaver.com
T: 01524 259 200
Good Morning,
I represent Your Health Ltd who owns and runs 10 care homes and a domicilary care company.
The Head office runs the care homes and also houses the office for the domicilary care company.
Can the head Office claim 5% vat on their energy bills, or do we have to pay 20%
best wishes
Brian
Author
Hi Brian,
Thanks for your query about VAT rates, and I can understand why you have this question because the answer is a bit messy unfortunately.
1) If the head office, and/or the domiciliary care office are on a separate electric / gas meter they will have to pay 20%.
2) If the head office(s) are on the same meter as a care home then you need to know and prove how much energy is used by the office(s). If at least 60% of the energy is used for “residential or care home” usage then the full amount will be allowed to pay the 5% VAT rate.
3) If the usage rate of the care/residential home (as above – 2) is less than 60%, then you can claim the percentage usage for the care home at the 5% VAT rate, and the usage balance at 20%.
If you are interested in reducing your energy usage across your business (water, gas, electric, waste, sustainability etc) please give me a call or arrange a short meeting HERE.
Please confirm all of the above is correct with your accountant as I am not an accountant and tax laws change very rapidly!
Many Thanks,
Jon Mullen
Energy Evangelist
Energy Price Saver Limited
T: 07517 459 224 / 01524 259 200
E: Jon.Mullen@EnergyPriceSaver.com
L: http://www.linkedin.com/in/jonmullenlancaster-energyevangelist
Hello! We have two care homes and were not aware of this reduction until recently. One of our suppliers backdated reimbursement of two years, but the other supplier is digging in and telling us they are not able to recoup this from HMRC and that we have to. We have had a bit of back and forth but they are essentially refusing to budge. The homes have been care homes for over 20 years so eligibility is completely provable. They claim that they are unable to reclaim the VAT. Can you advise on this at all?
Thank you in advance!!
Author
Hi Helen,
Thanks for your inquiry about the reduced rate VAT for residential homes. You are entitled to reclaim the overpaid VAT for up to 4 years from the initial claim date. So I’m presuming your claim for the first care home was only backdated for 2 years because you changed supplier. You also have the right to approach the previous supplier and claim from them for the previous 2 years.
With reference to the supply for the second care home you are not responsible for the supplier’s VAT relationship with HMRC. This is just an accounting procedure which they will have to show in their VAT calculations. If they are not reimbursing you for the additional VAT payment then you should inform them that your next step will be to report the disagreement to Ofgem.
If you want to know more please give me a call.
Thanks,
Jon Mullen Energy Evangelist
Energy Price Saver Limited
I have a care home that has been charged 20% for its electricity for at least 2 years, can I claim this overpayment back and how do I go about this as I was I unaware of the reduced vat that should have been charged.
Many thanks
Author
Hi Karen,
Thanks for your inquiry about the reduced rate VAT for residential/care homes. You are entitled to reclaim the overpaid VAT for up to 4 years from the initial claim date for both electricity and gas. You said that you have been charged 20% by your current supplier for 2 years. You also have the right to approach the previous supplier and claim from them for the previous 2 years.
If you want to know more please give me a call.
Thanks,
Jon Mullen Energy Evangelist
Energy Price Saver Limited