Temporary 0% VAT on Electricity: Good News for Charities and Sports Clubs
Temporary 0% VAT on Electricity: Good News for Charities and Sports Clubs
There is some welcome news on the horizon for many charities and qualifying sports clubs.
From 1 October 2026 until 31 March 2027, the Government is introducing a temporary change to VAT on qualifying electricity supplies, reducing the VAT rate from 5% to 0%.
For organisations already eligible for the reduced 5% VAT rate, this could provide a valuable reduction in electricity costs during the winter period.
What is changing?
Qualifying organisations that currently receive the reduced 5% VAT rate on electricity will temporarily see this reduced to 0% between 1 October 2026 and 31 March 2027.
This is particularly positive news for charities and qualifying sports clubs, where electricity can represent a significant ongoing cost.
Clubhouses, community facilities, changing rooms, offices, training facilities and other buildings can all have substantial energy requirements, so any reduction in costs is likely to be welcomed.
Could your organisation benefit?
The key point is that the temporary 0% VAT rate applies to electricity supplies that already qualify for the reduced 5% VAT treatment.
This could include:
- Charities using energy for qualifying charitable activities
- Community and amateur sports clubs
- Not-for-profit sports organisations
- Sports clubs with charitable status
- Community organisations operating qualifying facilities
However, eligibility will depend on the individual organisation and how the electricity is used.
Not every sports club will automatically qualify, which makes it important to check your current VAT treatment and ensure that your electricity supplier has the correct information.
Why now is a good time to review your electricity bills
With the temporary change approaching, this is an ideal opportunity for charities and sports clubs to review their current energy arrangements.
Questions worth considering include:
- Are you currently being charged the correct rate of VAT?
- Does your organisation qualify for the reduced 5% VAT rate?
- Has your energy supplier been provided with the correct VAT declaration or supporting information?
- Are your electricity bills being calculated correctly?
- Could there be historic billing issues worth investigating?
For some organisations, the biggest opportunity may not simply be the temporary move from 5% VAT to 0%, but ensuring that they are receiving the correct VAT treatment in the first place.
Potential savings during the winter period
The actual saving will depend on electricity consumption and the size of the organisation's energy bills.
However, removing a 5% VAT charge from qualifying electricity supplies could provide an immediate reduction in costs between October 2026 and March 2027.
For charities and sports clubs operating larger premises or energy-intensive facilities, this could be particularly helpful during the winter months when electricity usage can increase.
Clear Bridge Consultancy can help
At Clear Bridge Consultancy, we work with charities, sports clubs and other organisations to review their energy arrangements.
This includes looking at areas such as:
- Current energy contracts
- Electricity billing
- VAT treatment
- Metering arrangements
- Supply information
- Capacity requirements
- Opportunities to reduce unnecessary costs
If your charity or sports club is unsure whether it currently qualifies for the reduced VAT rate on electricity, now could be a good time to review your position ahead of the temporary 0% VAT period.
The change is scheduled to run from 1 October 2026 until 31 March 2027, so checking that your current electricity arrangements are correct before the changes take effect could help ensure your organisation receives the benefit it is entitled to.
If you would like an independent review of your current electricity arrangements, Clear Bridge Consultancy would be happy to help.
Please note: VAT eligibility depends on the individual circumstances of each organisation and how the energy is used. Organisations should ensure they meet the relevant qualifying conditions.
