All deliveries of Heating Oil both Kerosene (ULSK) and Red Diesel (ULSG) for quantities of 2,300 Litres or less are subject to the reduced 5% VAT rate.
Supplies of Heating Oil both Kerosene (ULSK) and Red Diesel (ULSG) for genuine domestic use are eligible for the reduced VAT rate of 5% irrespective of the Quantity.
Commercial deliveries of Kerosene (ULSK) and Red Diesel (ULSG) 2,301 Litres or more are subject to VAT rate 20% irrespective of Purpose of Use.
In case where the reduced rates of 5% VAT is being applied to quantities of greater than 2,300 Litres the provider must be certain that the supply is to a domestic dwelling or certain types of residential accommodation which are eligible for the reduced rate of 5%.
Examples of allowed residential accommodation are:
- Houses, Flats, Apartments, or other dwellings
- Houseboats
- Self-catering holiday accommodation
- Caravans
- Children’s homes
- Homes providing Care for the Elderly or disabled, people with a past or present dependence on alcohol or drugs or people with a past or present mental disorder.
- Hospices
- Institutions that are the sole or main residence of at least 90% of their residents
- Monasteries, Nunneries, and similar religious communities
- Schools and University residential accommodation for students or pupils
- Armed forces residential accommodation
The following are treated as part of the same residential unit:
Buildings such as garages used with houses.
Subsidiary buildings situated a short distance away, such as a garage in a block located away from a house, corridors, lifts, hallways, and stairways in a residential unit.
The following are not considered residential accommodation for the purposes of fuel and power:
- Hospitals
- Prisons or similar establishments
- Hotels, Inns, or similar establishments
If you want further information, please click the link below to HMRC VAT.
https://www.gov.uk/guidance/vat-on-fuel-and-power-notice-70119#qualifying-use
