How to save on VAT on your business utilities bill

VAT is naturally applicable to business utilities, together with other levies and taxes, but some organisations qualify for discounts and a reduced VAT amount.

The VAT on business energy accounts is normally set at around 20%, but your organisation may qualify for a discount on this percentage if it meets certain criteria:

If your company falls into one of the categories below, you may qualify for discounts and reduced VAT rates:

• You are a charity or not-for-profit organisation
• You meet the de minimis requirements for low consumption
• Your premises are commercial and non-commercial, and the majority of your usage is non-commercial

If any of the above points apply to your business, you should have reduced VAT rates incorporated into your energy bill. However, energy suppliers are unlikely to do this by default and it's up to you to check that the correct VAT rates are being applied. If you are paying more VAT than you should, it's up to you to submit the appropriate documentation to ensure that these discounts are applied.

It's also worth noting that if you qualify for a reduced VAT,  your business may qualify for exemptions from the main Climate Change Levy (CCL) rate, a policy that urges reduced gas emissions and encourages energy efficiency for businesses.

Does your business qualify for a VAT discount? An energy consultant can help you ensure the accuracy of the tax associated with your bills.  Not only can they find the best contract tariffs for your energy bills, but they can also ensure that your business is paying the correct VAT amount and making the most of any applicable discounts or reduction.

Next Digital Solutions create below infographic will help your business find out about the relevant reductions and whether or not you qualify for reduced rates of VAT. If in doubt, don't hesitate to contact the experts at Smarter Business.