Due to a mandatory industry wide change driven by the regulator Ofgem, all multi-metered premises were de-aggregated to single metered premises from July 2015. Following this change, the de minimis methodology defined by HMRC and the gas industry meter groupings diverged, causing the de minimis to be calculated at meter level rather than premises level as required by HMRC.
What is De Minimis
Domestic rate VAT (5%) should be applied if the combined consumption for all meters at a premises does not exceed an average of 145 kWh/day (4397 kWh per month) and will be exempt from CCL.
How does this affect Gas Supplies?
The change in the de minimis calculation required against invoices could have resulted in a potential undercharge of VAT and CCL.
Therefore any MPR that has previously dropped into the 5% VAT de minimis threshold will be charged 20% VAT. Regarding the historic changes, all Gas suppliers have handled the review of Invoices differently and to different timescales.
TEC will be directly in contact with any Members that are impacted.
Please note: Only previously aggregated meter supplies will have been effected.