VAT rate on 52 HMOs?

11:46 AM, 21st April 2020, 6 years ago 1

I have a portfolio of 52 all residential HMO units and my question is what VAT rate should I be paying?

British Gas states more than 60% or more domestic is 5%.

Please can anyone confirm.

Thank you James

From British Gas >> https://www.britishgas.co.uk/business/help-and-support/billing-and-payments/VAT-reduction

“Your business might be eligible for a reduced rate of VAT at 5% on business energy if any, or all the following circumstances apply…

  • Some of your energy is used for domestic purposes

If your business uses energy for residential purposes such as a care home or student accommodation, the proportion of energy used for domestic reasons will quality for 5% VAT.

If more than 60% of your business energy is used for domestic reasons, the 5% rate of VAT will apply to the whole bill.

  • You’re using a ‘low’ amount of energy

When your average daily consumption of energy is not more than the ‘de minimis’ limits set out by HMRC, then you are eligible to be charged 5% VAT on your gas and electricity bills.

Your average daily use must be no more than:

33kWh (1000 kWh per month) of business electricity

145 kWh  or 5 therms (4397 kWh per month or 150 therms) of business gas”


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