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Post Info TOPIC: Electricity recharged at 20% VAT
Stardoe


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Electricity recharged at 20% VAT
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Hi everyone on this chilly morning in Essex! (At least it's not raining....yet!)

Just have a quick question, one of my clients gets charged by the landlord for electricity she uses at the premises.  The VAT rate the landlord uses is 20%.....surely this should only be 5% as they would only get charged 5% on the original bill to them?

 



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Pauline
FoxAccountancyServices


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Hi Pauline

I think this is a bit like the postage and insurance questions we have had on here... the electric company has the right to charge 5% VAT, not the landlord.

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Stardoe


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Hi Michelle,

Yes, I've been reading some posts elsewhere and I gather that if the Landlord has "opted to tax" the building (which they have) then they should charge VAT @ 20% on the bill to the client.  They charge 20% VAT on the rent and other bills as well, so I suppose the electricity is no different.  Could the Landlord choose just to tax at 5% instead of 20% or not? 



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Pauline
FoxAccountancyServices


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He will only be able to claim the 5% VAT back, so the only thing he could do is charge the net, with 20% VAT on that

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Stardoe


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OK, many thanks for the clarification Michelle.

Btw....did you all get to meet up before Christmas after all?

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Pauline
FoxAccountancyServices


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It didn't come off.. maybe in February when the deadlines have passed..

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