electric bills & VAT

[ArranP]

The estate uses sub metering, the estate co ltd is invoiced by the electric co for the total consumption of the estate, the estate co ltd then invoices each individual house according to its consumption. This problem is this creates a VAT on VAT situation.

How can this changed / setup so VAT is only charged once.

Thanks

Arran

[thomasteve]

I thought VAT works why by those (eg. your estate co. ltd) who charge VAT to customers (you / your house ) being able to reclaim as a credit any VAT they paid from any of their suppliers (electric co).

So only the last one in the supply chain (you / your house) pays it as all the others are VAT registered and can reclaim the VAT they paid.

[ArranP]

Do you mean the estate co should use the pre-VAT from the electric co. invoice when generating its invoices?

[thomasteve]

Do you mean the estate co should use the pre-VAT from the electric co. invoice when generating its invoices?

It's up to the estate what price and profit margin they choose to use (charge you) on their invoices for reselling the electricity they purchased.

Usually it will be somewhat higher than what they paid (pre-VAT price) as they add more costs to cover their admin/maintenance/profit.