VAT on power bill

[Mercdriver]

Checked latest bill from EDF to see that they calculated the bill then deducted the government discount.

I would think they should deduct the discount then calculate the bill to avoid paying VAT on the discount.

Wrote to MP and surprise surprise got a typical reply from a politician which does everything except answer the question.

Why should the deduct the discount after calculating the bill, anyone on here experienced on VAT who can give me an explanation

[g7jtk]

I thought vat was for luxury items.
These days I would have thought fuel and power should be considered a necessity.

[Sheepshanks]

Mercdriver said:

Checked latest bill from EDF to see that they calculated the bill then deducted the government discount.

I would think they should deduct the discount then calculate the bill to avoid paying VAT on the discount.

Wrote to MP and surprise surprise got a typical reply from a politician which does everything except answer the question.

Why should the deduct the discount after calculating the bill, anyone on here experienced on VAT who can give me an explanation

It's not a discount.

[gmasterfunk]

Regulation 5.-6.(3) of The Energy Bills Support Scheme and Energy Price Guarantee Pass-through Requirement (England and Wales and Scotland) Regulations 2022 would seem to apply?

[Simpo Two]

g7jtk said:

I thought vat was for luxury items.
These days I would have thought fuel and power should be considered a necessity.

Be grateful Purchase Tax was abolished! https://en.wikipedia.org/wiki/Purchase_Tax

[Condi]

Sheepshanks said:

It's not a discount.

This, basically. It's support with the bill, not a discount on the energy used, and the way it's applied is simply as a credit to your account, same as if you upped the direct debit. What EDF have done is correct.

[Condi]

g7jtk said:

I thought vat was for luxury items.
These days I would have thought fuel and power should be considered a necessity.

VAT of 5% on domestic energy.