VATPOSG5600 - Gas and electricity: Impact on suppliers

Wholesale supplies

It is important to remember that, for wholesale supplies, the actual location of the electricity is immaterial. What follows therefore applies to electricity wherever it might be located in the world. For natural gas it applies to the extent that the gas is in a natural gas system either located within the UK, or linked to a system within the UK.

UK supplier

Customer established in UK

The supply takes place in the UK and is liable to UK VAT.

Customer established outside the UK

The place of supply is outside the UK and therefore outside the scope of UK VAT.

Overseas supplier

A wholesale supply by an overseas supplier to a customer established in the UK takes place, and is liable to VAT, in the UK. If the UK customer is registered for VAT, they will account for the VAT due as a reverse-charge (see VATPOSG5700). In the unlikely event of the customer not being registered for VAT, the supplier may be required to register here.

Supplies for consumption

The results here are dictated by the place of consumption.

UK suppliers

Consumption in the UK

The supply takes place in the UK and is liable to UK VAT.

Consumption outside the UK

The place of supply is outside the UK and therefore outside the scope of UK VAT.

Overseas suppliers

A supply by an overseas supplier to a customer consuming natural gas or electricity in the UK takes place, and is liable to VAT, in the UK. If the UK customer is registered for VAT, they will account for the VAT due as a reverse-charge (see VATPOSG5700). However, if the customer not registered for VAT the supplier may be required to register here.