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.