asked Her Majesty's Government:
Further to the Written Answer by Lord McIntosh of Haringey on 27 March 2002 (WA 72), why HM Revenue and Customs Notice 701/39, VAT Liability Law (August 2004) limits to 2,300 litres the amount of fuel oil, gas oil and kerosene which are deemed to be for domestic use at the reduced rate of VAT; and whether two deliveries, each under 2,300 litres, which together exceed 2,300 litres, made on the same day to the same premises qualify for the reduced rate of VAT. [HL3195]
The reduced rate of VAT for fuel and power applies to supplies for “qualifying use”, which the VAT Act 1994 specifies as meaning domestic and charity non-business use. All other supplies of fuel and power have been subject to the standard rate of VAT since 1990.
“Domestic use” includes supplies for use in dwellings and certain other residential accommodation, regardless of the quantity supplied. As a simplification measure, the law deems certain supplies within specified limits as always being for domestic use.
For supplies of fuel oil, gas oil or kerosene the specified limit is,
“a supply of not more than 2,300 litres”.
To guard against any possible abuse of the reduced rate, HM Revenue and Customs (HMRC) regards “a supply” as comprising all deliveries to one site on one day, even if there are separate delivery notes or invoices.
HMRC Notice 701/19, VAT Fuel and Power, contains detailed guidance on the VAT liability of supplies of fuel and power in particular circumstances.