VAT rate on 52 HMOs?

by Readers Question

11:46 AM, 21st April 2020
About 4 months ago

VAT rate on 52 HMOs?

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VAT rate on 52 HMOs?

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”



Comments

LANDLORD 35

9:30 AM, 22nd April 2020
About 4 months ago

This happened to me a couple of years ago when British Gas tried
to charge me commercial rates for a supply to an HMO.
They tried to charge 20% VAT and Climate Change Levy (CCL).
I got all the excess VAT and CCL refunded. Your tenants are
the users of the gas and they are domestic users, you simply pay the bill on their behalf. Write to the supply company and explain this and copy in your MP.


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