VAT reduction on energy bills for charities | Make It Cheaper

Energy guide for charities and non-profit organisations

Find out whether your charity could save money on energy bills with our short guide.

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Make It Cheaper's VAT exemption helpline:

0800 140 4692

Suppliers' VAT exemption forms

Most charities - whether they're registered or not - qualify for a reduced 5% Value Added Tax (VAT) rate and exemption from Climate Change Levy* (CCL) on their energy bills.  

This usually knocks about a fifth off the total cost but the onus is on you to tell your energy supplier about your eligibility, otherwise you may be missing out. If you have been overypaying, the good news is that you can also claim a rebate for the past four years - either from your supplier or from HMRC.

Make It Cheaper research shows that 46% of charities didn't know about the reduced VAT rate and CCL exemption - and 69% were unaware of the rebates.

The largest rebate received by a Make It Cheaper customer to date (June 2014) is £115,000, which was received by a school that had been incorrectly charged for VAT and CCL on its gas consumption for three years.

Common scenarios for incorrect VAT

  • Switching energy supplier or renewing your contract.
  • Changing the name of your organisation.
  • Changing legal entity - for example, schools leaving Local Authority control to become academies or free schools.

Who qualifies for reduced VAT and CCL exemption?

  • Charities.**
  • Care homes.
  • Free schools and academies.
  • Student accommodation and boarding houses.
  • Self-catering holiday accommodation - including caravans.
  • Businesses using less than 1,000 kWh/month of electricity or 4,397 kWh/month of gas.

How can charities apply for a VAT reduction or rebate?

If you think you're entitled to a bill reduction or rebate, you'll need a VAT Declaration Form to start your application. You can download the appropriate form for your energy supplier below and send it to the address shown.

  • British Gas
    British Gas Business, Spinneyside, Penman Way, Grove Park Leicester, LE19 1SZ
    Download form
  • CNG
    CNG, CNG House, 5 Victoria Avenue, Harrogate, HG1 1EQ
    Download form
  • Corona Energy
    Corona Energy Ltd, Edward Hyde Building, 38 Clarendon Road Watford, WD17 1JW
    Download form
  • EDF Energy
    EDF Energy plc, Registration Department, Southdownview Road, Worthing, BN14 8NL
    Download form
  • E.ON
    E.ON, PO Box 9042, Sherwood Park, Annesley, Nottingham, NG15 5AZ
    Download form
  • Gazprom Energy
    Gazprom Energy, Bauhaus, 27 Quay Street, Manchester, M3 3GY
    Download form
  • Haven Power
    Haven Power Limited, The Havens, Ransomes Europark, Ipswich, IP3 9SJ
    Download form
  • npower
    npower Direct Limited, 2 Princes Way, Solihull West Midlands, B91 3ES
    Download form
  • Opus Energy
    Opus Customer Services, Royal Pavillion, 2 Summerhouse Rd, Northampton NN3 6BJ
    Download form
  • Scottish Power
    ScottishPower Energy Retail Limited, SME Contact Centre, PO Box 7111, Cathcart, Glasgow G44 4GP
    Download form
  • SSE
    Scottish & Southern Energy, Grampian House, 200 Dunkeld Rd, Perth, PH1 3GH
    Download form

If you would like any advice or help with your application, our energy experts are available - free of charge - over the phone. We can also look at the unit rates you are being charged on your bill and tell you if we think there's a better tariff for you. If it's not the right time to switch, we can log your contract end date so that we can get in touch when your supplier is due to increase your prices again. Call 0800 140 4692, Monday to Friday, 9am to 5.30pm.

* By successfully applying for a VAT reduction, you automatically become exempt from the Climate Change Levy: currently 0.541p per kWh for electricity and 0.188p per kWh for gas.

** Under the Finance Acts 1993 & 1997, charities (registered and unregistered) whose energy is used "otherwise than in the course or furtherance of a business" for at least 60% of its actual use, can receive all their power supplies at the reduced rate of 5% VAT. If your 'non-business' use is below 60% of total usage, that proportion of the supply can still be applied to the reduced rate. For example, if 35% of energy use is non-business, 35% can be taxed at 5% and 65% at the standard VAT rate. 

Kevin Gill

Kevin is the Brand Communications Manager at Make It Cheaper, so he makes sure people know who we are, what we do and how we do it. He's from a family of small business owners (his dad runs a chippy, mum a dancing school, uncle a scaffolding company, auntie a fancy dress shop), so he's passionate about making it easier for customers to run their businesses. He spends lots of his time making our letters and emails easy to understand, nice to look at and a pleasure to read. You can contact him about anything to do with the Make It Cheaper brand at kevin.gill@makeitcheaper.com. You can email Kevin at kevin.gill@makeitcheaper.com

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