VAT certificates for gas and electricity

When a certificate is needed

Give the supplier a certificate when the account includes qualifying domestic or charity non-business use and the supplier cannot determine that treatment from the quantity alone. Typical examples include a care or residential site, a mixed commercial and residential building, or a charity with both business and non-business activity.

Do not submit a certificate just because the customer is a small company, a charity or VAT registered. If consumption is within the de minimis limit, the supplier should apply the qualifying treatment from the amount supplied. If the account is wholly ordinary business use, the standard rate remains the normal treatment.

What the certificate should contain

HMRC Notice 701/19 requires enough information for the supplier to identify the customer, the premises and the qualifying proportion. A supplier can use its own form, but it should not omit the substance of the declaration.

Complete a separate certificate for each supplier and premises where the percentage or facts differ. If one account covers several supplies, list the meter or supply identifiers clearly enough to prevent the certificate being applied to the wrong site.

• Customer name and address, and the supplier's name.
• The qualifying premises address and relevant account or supply identifiers.
• The exact percentage used for a qualifying purpose.
• A declaration that the information is correct.
• The responsible person's signature, printed name, position and date.

How to calculate the qualifying percentage

Direct sub-meter readings are usually the clearest basis. Where they are unavailable, use a reasonable calculation that reflects how energy is actually used. Depending on the premises, that may combine floor area, occupancy, heating loads, equipment ratings and operating hours. Avoid a round percentage with no working behind it.

Apply the 60% rule after calculating the qualifying share. If at least 60% qualifies, the whole supply receives the qualifying VAT treatment. Below 60%, state the actual qualifying percentage so the supplier can apportion the invoice. The supplier can ask to see calculations or other evidence.

• Record the period represented by the calculation.
• Explain assumptions and retain source readings or plans.
• Separate seasonal or operational changes where they materially affect the result.
• Have a responsible person review the calculation before signing.

Submitting, updating and changing supplier

Send the certificate through the supplier's stated tax or billing channel and keep evidence of delivery. Ask for written confirmation of the accepted percentage and effective date, then check the first invoice after the change. A certificate should not be treated as permanent if the building use, occupancy or activity changes.

A new supplier does not automatically receive documents held by the old supplier. Submit a fresh certificate when the supply changes hands, when the account moves to another legal entity or when a material change affects the qualifying percentage. Keep previous versions so each historic invoice can be matched to the declaration then in force.

Correcting earlier invoices

Ask the supplier whether it can apply the supported treatment to earlier periods and issue credit notes or replacement invoices. Provide the relevant certificate, calculations, consumption and invoice list. Relief is not created simply by asking for a backdated certificate: the qualifying use must have existed and be evidenced for the period claimed.

Check CCL at the same time because qualifying domestic or charity non-business use can also affect the levy. VAT and CCL are separate taxes, so confirm how the supplier has corrected each one and whether VAT was recalculated on the revised CCL value.