The reduced ratings—VATA 1994, Sch 7A

V4.406 Fuel and power

The reduced rate of 5% applies to supplies, acquisitions and importations of fuel and power of a description falling within VATA 1994, Sch 7A1. The Treasury may by Order vary Sch 7A2.

Fuel and power qualifying for the reduced rate

Supplies, acquisitions and importations of fuel and power qualify for the reduced rate of 5% if both:

  1.  

    •     they fall within one of the following categories3:

  2.  
    1.  

      –     coal, coke or other solid substances held out for sale solely as fuel

    2.  

      –     coal gas, water gas, producer gases or similar gases

    3.  

      –     petroleum gases, or other gaseous hydrocarbons, whether in a gaseous or liquid state

    4.  

      –     fuel oil, gas oil or kerosene

    5.  

      –     electricity, heat or air-conditioning

  3.  

    •     they are supplied for a qualifying use4, ie either of the following5:

  4.  
    1.  

      –     for domestic use

    2.  

      –     for use by a charity otherwise than in the course or furtherance of a business

The categories of fuel and power and the meanings of 'domestic use' and 'use by a charity otherwise than in the course or furtherance of a business' are addressed in more detail below.

Domestic use of supplies of fuel and power

Supplies for domestic use

A supply is for domestic use if the goods are supplied for use in6:

  1.  

    •     a building (or part thereof) consisting of one or more dwellings7

  2.  

    •     a building (or part thereof) used for a relevant residential purpose8, ie used for one of the following purposes,

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