Liability ― supplies of fuel and power

Copyright © 2026 LexisNexis
Produced by a Tolley Value Added Tax expert
Value Added Tax
Guidance

Liability ― supplies of fuel and power

Copyright © 2026 LexisNexis
Produced by a Tolley Value Added Tax expert
Value Added Tax
Guidance
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This guidance note examines the liability of supplies of fuel and power.

For an overview of the concept of VAT liability generally, see the Liability ― overview guidance note.

For in-depth commentary on the legislation and case law on supplies of fuel and power, see De Voil Indirect Tax Service V4.406.

Liability of fuel and power ― the basics

The default position is that a supply of fuel and power will be liable to VAT at the standard-rate. However, certain supplies of fuel and power which are made for a ‘qualifying use’ (see below) are subject to the reduced-rate of VAT.

The reduced rate applies to a wide range of kinds of fuel and power including solid fuels, gases, oils, electricity, heat and air-conditioning, provided they are supplied for a qualifying use.

Qualifying use includes both ‘domestic’ use and a charity’s non-business use. In this context, domestic use includes certain ‘deemed’ domestic supplies which would not be considered to be domestic in the ordinary sense of the term. For example, some

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  • 18 Dec 2025 16:50

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