19 Feb
VAT On Your Business Energy Bills And The Discounts Available
Posted on Feb 19, 2024
by D-ENERGi
Value Added Tax (VAT) is a tax that is applied to most goods and services in the UK, including business energy bills. The standard rate of VAT is 20%, but there are a number of discounts and exemptions available to businesses, which can help to reduce the amount of VAT you pay. Not only is this a useful piece of information for small businesses to know, it may also mean more money going back into your business rather than to the dreaded tax man!
VAT on electricity for businesses
Much like any other goods or services you access as a business, you will pay VAT. The current standard rate of VAT is 20%. However, since the government wants to offer as much incentive to businesses as possible to reduce their energy consumption and improve their energy efficiency, such discounts and exemptions of VAT payments can be applied. This is of course, subject to eligibility.
If you are eligible for a discount or exemption on your electricity VAT, this should be applied automatically by your supplier. However, you may need to confirm this at the time of approval. Ensuring that all parties are aware of the reduced fee. Keep an eye out on your bills for what you are paying. For more help understanding your bill click here.
Discounts and exemptions available to businesses from the UK government
- The Climate Change Levy (CCL) exemption: This exemption applies to businesses that use certain types of renewable energy, such as solar power, wind power, and biomass.
- Fuel Duty: If you use a generator to power your business, you may be able to reclaim some of the Fuel Duty that you pay on the fuel you use.
- The De Minimis supply: If your business uses less than a certain amount of energy each year, you may be eligible for a reduced rate of VAT of 5%. The de minimis limits are 1,000 kWh of electricity per month or 4,397 kWh of gas per month.
Signing a CCA (Climate Change Agreement)
Signing a Climate Change Agreement (CCA) as a UK business comes with both obligations and benefits, primarily in the form of potential financial savings and reduced carbon footprint. Here’s a breakdown:
What is a CCA?
A CCA is a voluntary agreement between your business and the Environment Agency. In exchange for meeting specific energy efficiency and carbon reduction targets, you receive a discount on the Climate Change Levy (CCL), a tax added to your electricity and fuel bills.
By signing a CCA you are agreeing to making improvements to the energy efficiency of your business, reducing your energy consumption. This provides you with the opportunity to receive discounts of up to 90%.
It is important to remember that discounts and eligibility for discounts is always subject to change as per the government’s guidelines. To ensure you are always up to date with the latest information regarding discounts and exemptions on your business energy bills, read the GOV.UK site.
For more energy saving tips and advice on how to improve the energy efficiency of your business premises, check out more of our D-ENERGi blogs.
Looking for a business gas quote? Fed up of long waiting times. Why not give us a try, you may not of heard of us before but our customers love us. Rated within the top 5 gas suppliers on Trustpilot. View our customer reviews page. We have been supplying business gas for 15 years based in the heart of Manchester. We are a small family energy business and not part of the Big Six – we can not only match their business gas quote rates, but on most occasions beat them.
Our friendly UK based call centre will guarantee your call to be answered in a maximum of five rings and no long waiting times.
We offer a friendly and personalised service, account managers are dedicated solemnly to you so any query or issue you may have is dealt with by an expert. This way we have built a loyal growing portfolio of hotels, care homes, schools who all use us as their preferred business gas supplier.
Managing your finances in your business is important and is something that cannot be dealt with light heartedly. This is what drives us to give you the best fixed prices we can offer. With a fixed price business gas quote from D-ENERGi, you know specifically how much you will pay on your gas bill every single month.
You may now be thinking why should I get a business gas quote from D-ENERGi? We have had plenty of practise forging the best energy deals and in negotiating exclusive deals higher up the supply chain so we can pass the savings on to you.
Get a free no obligation business gas quote from D-ENERGi or call 0800 781 7626.
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The majority of businesses require considerable more electricity than the average home. This can work in your favour as it can enhance your negotiation price with your commercial energy supplier – in most cases.
Finding the perfect deal for your commercial electricity rates can be quite tedious and time consuming.
As a result you will find that most businesses use a specialised energy broker experienced in energy negotiation, which is understandable. However most energy brokers will typically add in a margin on the unit rates and standing charge so they can generate a commission on the energy a businesses may consume. Therefore the most reliable way to getting the best deal is by directly calling commercial energy suppliers yourself and shopping around. You may be surprised about the fact that by speaking to a commercial energy supplier direct, like ourselves, you may able to get better commercial electricity rates.
D-ENERGi is a direct commercial energy supplier, fill in our quote form and receive a free, no obligation quote from us. Or if you would prefer to talk to us direct, call on 0800 781 7626. We are a leading commercial independent energy supplier based in the heart of Manchester. A small energy supplier working under the radar of the big six for over 15 years. We know how it feels when you are being passed from pillar to post and having to endure long waiting times when trying to resolve a customer query, which is why we have a 3 ring guarantee to all our customers.
All energy suppliers will try and persuade you to allow them to supply your business electricity, but we want to ensure you that with a D-ENERGi quote you will feel no pressure – it is completely your decision, only you know what is best for your business and its energy needs.
In the 1990’s a deregulation occurred which changed the game. Both domestic and business energy customers all over the UK can become a customer to the energy supplier of your choice. Once you switch suppliers, the only change you will notice is a different company logo on your bill and considerably lower charges.
The ‘Big 6’ energy suppliers admittedly supply the majority of businesses in the UK but if you shop around, you should notice smaller, less popular suppliers could help you and your business save amounts you wouldn’t believe – it’s worth switching your investigation mode on!
Comparing electricity prices
Comparing the prices for electricity can and will help you find what it is exactly that you need for finding the cheapest rates. Proceed with the following steps to learn how to compare electricity rates to the best of your ability:
Find a recent if not the most recent electricity bill from your current supplier.
Look around for a trusted electricity price comparison site, ensure the site you find offers you a whole market view, some of them will only show you plans you can switch to via their company
Fill in the data captures with your electricity usage details as requested – this is so you can receive the most accurate results which are specific to your region and consumption
Review your electricity comparison results – switching online could save you hundreds or you may just be checking to see how your current electricity plan compares to the rest of the market.
Enjoy your savings!
Talk to our experts today for competitive business energy quotes today!
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