Energy for charities

What is different about energy for charities

Charities do not have a separate energy market. You compare the same suppliers, the same contract types and the same terms as any other organisation. What changes is the tax on the bill, and that depends on how your charity uses each supply rather than on charitable status alone.

HMRC's guidance on fuel and power (VAT Notice 701/19) says that if a charity does not make a charge, its activities are generally non-business, and fuel and power used in those non-business activities is charged at the reduced rate of VAT. Activities a charity charges for, such as a shop, a café or room hire, are normally business activities, and energy used for them is normally standard-rated.

The Climate Change Levy follows a similar line. GOV.UK says you do not pay the main rates of CCL on certain supplies, including where you are a charity engaged in non-commercial activities.

So the first job before you ask for quotes is to work out, for each premises, how much of the energy goes on non-business activities. Everything else in a charity energy comparison flows from that.

VAT on charity energy, including the temporary zero rate

There are three VAT positions a charity's supply can be in:

The temporary zero rate. HMRC has introduced a temporary zero rate of VAT on qualifying supplies of electricity in Great Britain (England, Scotland and Wales) from 1 October 2026 to 30 June 2027. It was originally due to end on 31 March 2027 and was extended by three months at Budget 2026. For a charity, that means electricity used for non-business activities in Great Britain is charged at 0% during that period instead of 5%. Three limits are worth knowing:

• it covers electricity only; gas stays at the reduced rate for qualifying use
• it covers qualifying use only; the business share of a supply stays at the standard rate
• in Northern Ireland, qualifying electricity stays at the reduced rate of 5%

HMRC says there is no change to what counts as qualifying use, so if your supplier already treats your supply as qualifying, the zero rate should apply to the electricity. Check your bills during the period, and check HMRC's current notice, because this is time-sensitive.

Electric vehicle charging. HMRC says electricity supplied through public or workplace charge points is not domestic use and is outside the de minimis limits, but it may still qualify where a charity uses it for a non-business purpose.

What suppliers ask charities for

Suppliers decide the VAT and CCL they charge from the information you give them, so expect them to ask for evidence of your charity's status and use before they apply a reduced rate. Exactly what they ask for varies by supplier, but HMRC's notice sets out what a VAT certificate for mixed use should contain:

• The supplier's name and address
• Your charity's name, address and VAT registration number
• The address of the premises the supply relates to, with a separate certificate for each premises
• The qualifying use as an exact percentage of total use
• A signed declaration by a responsible officer or official, with their name, position and the date
• Confirmation that you have read the guidance and will tell the supplier if your qualifying use changes

HMRC says suppliers must make reasonable checks on certificates, so you may be asked for the calculations behind your percentage, and you should keep copies. It also warns that anyone giving an incorrect certificate may be liable to a financial penalty. Base the figure on how your premises are really used, and ask your accountant or HMRC if you are unsure.

When you switch, the new supplier will need its own declaration. Have it ready with your quote request so the right tax treatment is in place from the start rather than corrected later.

Comparing charity energy quotes fairly

Trustees and finance leads often need to show that a contract was chosen carefully. A fair comparison puts every quote on the same footing:

1. List every supply. Each building, hall or shop usually has its own electricity supply and, where there is gas, its own gas supply. Note the contract end date of each one.
2. Work out the use at each premises. Which supplies are wholly non-business, which are mixed and which are wholly business (a charity shop, for example)? This drives VAT and CCL.
3. Ask for quotes on the same basis. Same consumption, same start date and the same contract length, with prices shown the same way before and after VAT and CCL.
4. Read the principal terms. Ofgem requires broker fees to be shown clearly in the principal terms of non-domestic contracts signed on and from 1 October 2024, so you can see the commission included in your rates before you agree.
5. Check what happens at the end. Rollover onto a new fixed term, out-of-contract rates or something else. Diary the switching window for next time.
6. Record the decision. Keep the quotes, the terms and the reason for the choice with your trustees' papers.

There is no cooling-off period once you agree a business energy contract, and that applies to charities too. Read is there a cooling-off period for business energy contracts? before anyone signs.

Protections for smaller charities

Ofgem's microbusiness definition is based on size and consumption. If your charity has fewer than 10 employees and an annual turnover or balance sheet total of no more than 2 million pounds, or uses no more than 100,000 kWh of electricity or 293,000 kWh of gas a year, ask your supplier whether you are treated as a microbusiness. Microbusiness protections include clear contract information, renewal price information before the contract ends, and a 30-day cap on termination notice for evergreen contracts. See microbusiness energy rules and small business energy comparison.

Micro and small businesses can get help from Citizens Advice and, for supplier complaints that are not resolved, the Energy Ombudsman. Back-billing rules also protect microbusinesses: Ofgem says you should not have to pay for energy used more than 12 months ago if you were not accurately billed for it, unless you acted unreasonably.

Taking on a new building, such as a donated property or a new lease, is a change of occupier. Tell the supplier as soon as you can and agree a contract, or you may pay deemed rates in the meantime; see change of tenancy.

How Forever Communications helps charities compare

Forever Communications works as an agent of Fidelity Energy, an independent business energy broker that says it works with a network of 24+ suppliers. Your comparison covers that panel; if you want a particular supplier included, tell us. In practice:

• We collect your bills, your contract end dates and your VAT position for each premises
• Fidelity Energy prices your supplies across its panel on the same basis
• We help you lay the quotes, the tax treatment and the broker commission side by side so trustees can see the full picture
• If you accept a quote and the supplier accepts you, Fidelity Energy arranges the supply contract
• Fidelity Energy also offers green energy procurement if your charity wants renewable electricity backed by REGO certificates, and says you can choose how much of your electricity comes with them

Commission and fees. Fidelity Energy is normally paid commission by the supplier you choose. Under its terms, the commission is added to your unit rate and/or daily standing charge, and the estimated total is set out in your contract documents; Ofgem also requires broker fees to be shown in the principal terms of non-domestic contracts signed on and from 1 October 2024. You can instead ask at the start to pay Fidelity Energy by direct invoice, and its terms set out when a contract cancellation fee applies. Forever Communications is paid by Fidelity Energy out of the commission Fidelity Energy receives from suppliers. See energy broker fees.

Dispute resolution. Fidelity Energy is listed on the Energy Ombudsman's register of energy brokers, with membership active since 1 December 2022 (we checked on 1 November 2026). Our energy broker ombudsman page explains how to check the register and how complaints work.

We are not tax advisers, so for questions about your charity's VAT status, your accountant and HMRC's guidance are the right sources.

When you are ready, contact us with a recent bill for each supply and your contract end dates.