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‘Schoolboy Errors’ on Energy Bills
Free schools and academies able to claim rebates for overpayments on energy bills.
Schools leaving Local Authority control are being urged to check their energy bills for easy-to-spot mistakes after a series of rebates for incorrect charges were successfully arranged by the business cost saving service, Make It Cheaper.
In one case - an Academy in North London - a rebate of £115,000 has been received from its gas supplier to cover billing errors made over a three year period.
The overlooked, and often unnecessary, charges appearing on bills are a combination of Climate Change Levy (CCL), higher-rate Value Added Tax (VAT) and 'Deemed' tariffs. Free Schools and Academies have automatic charity status that qualifies them for exemption from CCL which cuts around 5% off their energy bills, plus a 15% reduction in VAT to just 5%. However, in moving away from Local Authority control, many schools would appear to have these discounts removed, reverting to standard business billing that includes CCL charges and the higher-rate VAT applied.
To make matters worse, energy suppliers will often consider a school's change of name or status as a reason to automatically apply their highest tariffs - known as Deemed Rates - for any gas or electricity used before a new contract can be put in place. Figures published by Ofgem show that Deemed Rates are typically 69% more expensive than rates charged for a new gas contract and 82% more for electricity. The regulator also points out that customers spend an average of 407 days on Deemed Rates before they realise and are able to arrange new contracts.*
Jonathan Elliott, founder & CEO of Make It Cheaper, commented: "This is a triple-whammy of totally-avoidable costs that are clobbering schools. It's often only when they look around for a cheaper supplier and speak to an energy broker that they understand why their bills are so high. The good news is that, as well as lowering their gas and electricity bills going forward, schools can also claim rebates for overpayments going back four years. So when the penny drops, there's often a substantial windfall to follow."
According to the Department for Education, there are almost 4,000 Academies and 174 Free Schools open in England.**
The first step for any qualifying organisation looking to claim exemptions or rebates from its energy supplier is to complete a VAT Declaration form and submit it for assessment, which normally takes around 14 days. For more information and the necessary forms for each energy supplier, call Make It Cheaper on 0800 140 4692 or visit www.makeitcheaper.com/CharityVAT.
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** Free Schools & Academies:
About Make It Cheaper: Based in Central London with 140 staff, Make It Cheaper has been the No.1 destination for businesses to get a better deal on their utilities since it launched in 2007. Following its acquisition of www.UKPower.co.uk in 2012, Make It Cheaper also provides competitive energy prices and expert advice for households - online and via a freephone service. Its supplier panel includes all of the Big 6 and 25 of the smaller domestic and non-domestic energy companies. For businesses and charities it also offers savings across other overheads including: telecoms, insurance and merchant services. The company has appeared in the Fast Track 100 for the past three years and has won the title of 'Consumer Champion' at the Energy Live Consultancy Awards for the past two years. Its 2014 'Net Promoter Score', based on 2,487 customer satisfaction questionnaires completed year-to-date, is 67.
Further information: Nick Heath 020 7654 0730 / firstname.lastname@example.org