The University can obtain gas and electricity at the reduced 5% VAT rate providing it is purchased for a “qualifying use”.
“Qualifying use” for the University has two meanings:
- Domestic or residential use (e.g. student accommodation)
- Non-business use (mainly in buildings used for non-commercial research).
Where fuel or power is partly for qualifying use and partly not, then an apportionment must be made. However, if at least 60% is supplied for qualifying use, the whole supply may be charged at the reduced rate.
In order to claim the reduced rate, the University must issue certificates to the energy supplier stating the percentage of qualifying use at each premises (normally each building).
This exercise is carried out by the Tax and Estates Teams every two to three years, or when there has been a significant change of qualifying use in a particular building.
Please contact the Tax Team if you think an updated certificate may be required