VAT on electricity supply?

[lakelandfolk]

Hi,

Just received a quotation for work required to provide an electricity supply to the plot, it will involve digging a trench across a public highway, and vat has been added to the basic cost of materials and labour. Should I challenge the vat element?

[le-cerveau]

I would,

 

For our build ENWL tried to charge us VAT on the whole lot (it is knock down and re-build) stating as there was an existing supply it wasn't a new build, but I pushed them on it and they relented in the disconnection of the existing supply was VAT enabled, but the re-connection was VAT free.

[lakelandfolk]

Thanks, this is ENWL too and will be a new build on a site with no existing utilities, so will go back to them.

[Temp]

https://www.gov.uk/government/publications/vat-notice-708-buildings-and-construction/vat-notice-708-buildings-and-construction

 

See para 2.1 for first time connections. Should be zero rated to you, (you cannot reclaim vat charged to you in error). Ask for requote pointing out this is a first connection for a new dwelling and quote VAT notice 708. I

Edited October 4, 2016 by Temp

[lakelandfolk]

Many thanks Temp, will do

[cwr]

I'm facing the same problem with our provider who want to charge VAT. It is a replacement dwelling so need them to disconnect the old house and connect up the new.  This is the response to my questioning of VAT being on the quote:

 

'A replacement dwelling where you are moving an existing meter to a new meter position on a new house is deemed an alternation. This is why VAT has been charged and cannon be changed'

 

Is this a common situation? 

If they force me to pay the VAT am I sill able to claim it back?

[Conor]

I had the same issue in regards to removing existing supply to the house and moving to a temporary kiosk - VAT was charged and there is no option to get it back as it's a service.

[Temp]

+1 You can't reclaim VAT on services or on VAT paid in error.

 

I can't find anything official online that covers this specific case but the general principle is that the first time connection to a qualifying building is zero rated to you. 

 

I think you will have to try the VAT help line. Explain that its a total knock down and rebuild that qualifies zero rating on materials - So should the connection to the new house be classed as a new connection (zero rated) or an alteration (standard rated)?

[cwr]

Thanks for the replies and suggestions.

I phoned the VAT helpline, in agreement to previous posts on this thread they said that VAT should be charged on the disconnection, but not on the new connections and told me to quote VAT notice 708 section 2.1.

I've emailed the electric supplier with that info, will let you all know what response I get.

[Conor]

This is good to know, I've still the new connection aspect to book in.

[newhome]

On 05/02/2021 at 11:01, cwr said:

they said that VAT should be charged on the disconnection, but not on the new connections

At least you got somewhere. It rather goes against the idea that demolishing an existing building can be zero rated but disconnecting the supply to allow the demolition to take place can’t. Oh well. 
 

[cwr]

Not getting anywhere with NIE though...

 

Their response was that an alteration (which is what I applied for) has VAT charged, and that's the way it is. They told me an alternative would be to apply for a disconnection and then submit an application for new connection. OK, I get that. However "your disconnection will need paid and completed before we design your new connection". Seriously???

 

I also asked if I could have a dual quote showing the non-contestable works. (for these that don't know, this is part of the work such as laying the underground cable that can be completed by a number of eligible contractors, the idea being that an element of competition is introduced into the market and it's not a monopoly for NEI who could then charge whatever they want. That's my understanding of it anyway). Response to that was "we do not provide dual offers for an alteration. This is only possible for a new connection".

 

To be continued...

[Bitpipe]

Yes, VAT applicable to disconnections, alterations and service moves.

 

If you can, just move it once from the house to a kiosk that will initially give you site temps but can also be your final supply - you just run the house supply back to the kiosk and need never bother the DNO again or pay their fees.

[cwr]

Quote

If you can, just move it once from the house to a kiosk that will initially give you site temps but can also be your final supply - you just run the house supply back to the kiosk and need never bother the DNO again or pay their fees.

 

Funny enough I tried that about a year ago. Started of by phoning up NIE to ask if that could be done and was told yes of course, so I did the application showing the meter to go in an 'outbuilding' (would have built a 1m square block kiosk) only to be phoned back and then told that the days of putting meters in garages/outbuildings/kiosks etc are over and they must be on a wall of the house. Turns out the person who first answered my call wasn't really the right person to advise, and only said yes as they had their meter in an outbuilding that was installed years ago...

 

Would have been really handy, as I would then have been in control (via electrician) of swapping over to the new build as and when required, and could even had a temp supply.

[cwr]

Not getting anywhere on this. 

Yes I can make 2 applications I am told, one for disconnection and one for new connection, but the latter won't even be quoted on until the disconnection is performed. 

I was kinda hoping to have both disconnection and new connection done on the same day. Even a day without electric we could live with. Is that too much to ask for...?

 

[Barryscotland]

On 02/02/2021 at 12:57, cwr said:

I'm facing the same problem with our provider who want to charge VAT. It is a replacement dwelling so need them to disconnect the old house and connect up the new.  This is the response to my questioning of VAT being on the quote:

 

'A replacement dwelling where you are moving an existing meter to a new meter position on a new house is deemed an alternation. This is why VAT has been charged and cannon be changed'

 

Is this a common situation? 

If they force me to pay the VAT am I sill able to claim it back?

Don’t no about where you are but if there classing it as an alteration instead of new connection you should be saving a lot on council road opening permit.  I was initially quoted £600ish for road opening permit for our supply but as we already had a supply and was just changing the way it came into the plot it ended up being £60 as it was deemed an alteration not new connection.