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HMRC internal manual

VAT Fuel and Power

Scope of the reduced rate: domestic Use: supplies to landlords, residential homes and similar

In addition to supplies to households, the reduced rate applies to supplies

  • to landlords for eventual domestic use by their tenants,
  • to schools providing student accommodation, to residential care homes
  • and the like.

Residents are unlikely to receive individual fuel bills, as the supply is usually to the institution. In many cases, the VAT incurred is attributable to exempt supplies and cannot be recovered by the business. If it were charged at the standard rate, this would be reflected in higher charges being made to the residents. The institution is therefore regarded as the final consumer.