Business energy VAT and Climate Change Levy questions
Business energy is charged at 20% VAT plus the Climate Change Levy (0.801p per kWh for 2026/27) unless you qualify for relief. Three routes qualify: low usage, charitable non-business use, or 60% or more domestic use. Relief is claimed with a one-page declaration and overpayments are reclaimable up to four years back.
Last reviewed 2 September 2026 by Utilities Made Simple · independent, whole-of-market, supplier-paid — how we are paid
5 answers in this section
- Is my business eligible for 5% VAT on energy?You qualify if any one of three things is true: your usage is below the de minimis thresholds (averaging no more than 33 kWh a day of electricity or 145 kWh a day of gas), you are a...
- How do I claim back overpaid VAT on business energy?Submit a VAT declaration to your supplier and ask for it to be applied retrospectively for up to four years.
- What is a VAT declaration certificate for energy and where do I get one?It is a short form — usually one page — in which you tell your energy supplier which qualifying route applies to your site and what percentage of the supply qualifies.
- Do charities pay VAT on energy?Charities pay 5% VAT and no Climate Change Levy on the proportion of energy used for non-business activities — not automatically on everything.
- Do I still pay the Climate Change Levy if I qualify for 5% VAT?No.
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