Standard VAT on commercial electricity and business gas bills applies if annual turnover is more than £85,000.
If your business falls into this category you need to register for VAT with HMRC. Once you have applied, you will receive a VAT registration certificate.
Energy suppliers will charge VAT at a standard rate. So if you are eligible for the discounted rate, you will need to inform them to alter your bills.
Your business will qualify for a 5% discounted rate if any of the following apply:
Your company’s gas usage is less than 4,397 kWh per month, and business electricity usage is 1000 kWh per month;
You run a charity or non-profit;
60% or more of the energy used by your company is for domestic purposes.
You need to contact your energy supplier if any of the above apply to qualify for the 5% rate.