VAT on Recharged Utilities?
Tax Planning and Financial

SJP Cheshire
SJP Cheshire
0 Thanks
4 Posts
1 month ago

Good afternoon all

We have a limited company which is VAT registered. We have several properties - some are "vatable" and some are not. 

So, we have put in third party meters into the properties for electricity. The tenants top up and then the money is collected via Stripe and paid to us on a regular basis. So we are looking for some VAT advice because we have set the meter tariffs so that we are paid what we are being asked for via our Energy Supplier's bills. Sometimes these include 5% VAT and sometimes 20% depending on the property and our Supplier's policies.
I have queried the Stripe payments with our accountant and they are saying that if a property is VATable, then we have to take our supplier's charge which already has VAT added and then add a further 20% on top, for this electricity recharge. 

We would like a second opinion because this means some of our tenants are going to have a 20% rise in their electricity bills overnight, we are going to have to foot the bill for the VAT we haven't charged because it feels wrong to retrospectively ask them to now pay for it due to our error, and our concern is that some of these tenants are little guys who probably aren't VAT registered. 

If anyone can please give us some guidance on this, we would be really grateful. I think that we are realising our accountants are not property or VAT experts and although they are good generally, we are going to be looking for someone who is both to guide us in the future so also any referrals/recommendations would be much appreciated. 

Thank you for your help in advance and I hope you all have a good weekend.  :)

Please Login

You must be logged in to participate in our forums, to continue please login below.

Not a member? From only £99 you can join in the discussion and get access to member's only resources and services.

As the home for landlords, the NRLA are here to help you save time, save money, and stay compliant. NRLA membership gives you access to a vast range of expertise, resources, and exclusive member benefits and savings, designed to help and empower members. We also play a pivotal role in campaigning and championing the interests of landlords.