Many charities are overpaying on their energy bills

An investigation by ITV News has discovered that many charities are being charged too much on their energy bills.

Charities are entitled to a discount on VAT and the climate change levy that adds up to 20% of a bill.

Our research of more than 100 charities shows around a third don't know about it and believe they may be overpaying.

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Village hall: Cost of bills should be down to suppliers

A treasurer at a village hall, which holds events for good causes, told ITV News energy companies should take responsibility on reducing power bills for registered charities.

Val Belton, Burpham Village Hall treasurer. Credit: ITV News

Val Belton told ITV News: "I think it should be down to the energy companies to raise this question with you particularly when the bill is for Burpham Village Hall - they may think 'maybe that's a registered charity, I'll clarify whether they are'."

HMRC on how charities can get an energy bill refund

An ITV News investigation has shown that many charities are being over charged on their electricity bills.

We asked HMRC how charities can get a refund and whether they accept some charities are missing out on reduced energy bills. Here are their responses:

Does HMRC accept that many charities which are entitled to reduced VAT are missing out?

No, HMRC believes that the vast majority who are entitled to receive the reduced rate of VAT and CCL exemption. With millions of supplies made by fuel and power companies, it is not possible for HMRC to determine that every supply is taxed correctly. Ultimately though, the responsibility lies with the individual charity.

– HMRC statement

How does a charity get a refund for overcharged VAT?

If a charity believes it has been charged the wrong rate of VAT on a supply of fuel and power, or that it has been charged CCL, it should contact its supplier and request a refund.

– HMRC statement


Energy UK: Charities need to contact supplier on bills

Organisations need to tell energy suppliers they are registered as a charity so the correct tax rates can be applied, Energy UK told ITV News.

The advice comes after an investigation by ITV News showed many charities are overpaying on their energy bills.

When charities register with the Charities Commission it is vital they are told all the benefits to which they are entitled and how to apply.

It is not always obvious from the name that an organisation may be registered as a charity and suppliers can only know if they are told.

Charities should get in touch with their supplier so the appropriate tax rates can be applied. Suppliers want to help where they can and take their responsibility to their customers seriously but are unable to do so if they don’t have all the facts.

Under current HMRC rules companies cannot pay back more than four years of VAT.

– Energy UK statement
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