HMRC One to Many letter – Fuel and Power Supplies risk of VAT errors
HMRC launched a One to Many (OTM) letter campaign at the end of July 2023 targeted at energy businesses. The letters were issued via the businesses’ Customer Compliance Managers (CCMs). A copy of the letter is provided below.
It is an educational letter that has been issued to businesses to review the relevant VAT guidance (VAT Notice 701/19) and check their current billing and accounting systems to make sure they can account for VAT in line with the guidance, including checking that where a premises has multiple meters, these are aggregated before a bill is issued for the premises. HMRC want businesses to review the guidance and ensure they understand it and what it requires them to do in terms of measuring supplies to apply the de minimis limits test. If, as a consequence, they believe errors have occurred, HMRC are informing them how to correct these via the relevant processes, as per VAT Notice 700/45.