VAT exemption

VAT exemption form in envelope next to someone working on a laptop

You could save money on your business energy bills, if you’re eligible for business energy VAT exemption.  

Why does my business have to pay VAT?

Even if you're VAT registered you will still be required to pay VAT on certain goods and services, such as electricity and gas. However, if you’re VAT registered and you pay more VAT than you charge your customers, then you will be able reclaim the difference from HMRC.

Some businesses are able to apply for a reduced rate of 5% VAT.

You are eligible to apply for VAT exemption if: 

  • You manage residential properties such as care homes, student accommodation, flats or caravan parks, and the energy will be used for domestic use 
  • You’re a charity 
  • You run a religious building
  • You’re a free school or academy 
  • You own or manage self-catering holiday accommodation, including caravans  
  • Your business uses less than 1,000 kWh/ month of electricity or 4,397 kWh/month of gas (check your latest bills to see how much you’ve been using)

If you’d like some help determining your VAT chargeability, please get in touch at or call us free on 0808 168 3888, and we can work through your energy requirements together.

If you think your organisation is eligible for VAT exemption to be applied to your energy invoices, please let us know by filling out our VAT exemption form; and either post or email it back to us.

Further information regarding VAT is available from HMRC.
Or call HMRC National Advice Centre 0845 010 9000.

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0808 168 3888