VAT and climate change levy on energy supplies

Academies should ensure they have completed a Certificate of Declaration with their energy suppliers to claim for the reduced VAT. We brought this to the attention of our academy clients back in 2011, but have recently become aware of a number of instances were academies were being charged VAT at the standard 20%.

On the face of it this does not cause academies a problem because they can, in theory, recover the VAT. However, an academy has any business supplies then their VAT claim ought to be restricted and this would impact on the VAT recovered on energy bills. It is therefore preferable to ensure that energy supplies are charged at the reduced 5% rate.

We have also become aware of academies who have been charged the Climate Change Levy by their energy suppliers. Our understanding is that this levy does not apply to academies unless they have significant business activities, and so if you have been charged the levy we recommend that you contact your energy suppliers for a refund. It is certainly worth reviewing your energy supplier invoices to check if you are not sure if you have been charged.

If you require assistance in this area please contact me or an academy schools experts at your nearest location.

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