Understanding Business Energy VAT
The VAT equation: How to Solve it
VAT is a ‘consumption tax’ that is added onto a product after a value has been added both during production and after. It is the cost of the actual product minus the cost of materials used to produce the product. That’s the equation!
Your business, as standard, will include 20% VAT for all of the services and goods you offer, and you will need to pay this VAT to HM Revenue and Customs every 3 months. All businesses that have an annual turnover of £82,000 or more will have to pay VAT – it is illegal not to do so.
Types of VAT
The Charge for Electricity and Gas
'Mixed Use' Reduction: Do you Qualify?
The Climate Change Levy
It was introduced on the 1 st of April 2011 to help increase energy efficiency and lower our carbon emissions. Businesses that qualify for a reduced VAT rate also tend to be exempt from incurring the CCL charges. A business would be exempt from CCL if they are dabbling in energy efficient practices.