What is the 33 kWh a day de minimis limit?
It is the HMRC small-use threshold: if a premises uses on average no more than 33 kWh of electricity a day (about 1,000 kWh a month), the supply is charged 5% VAT instead of 20%. The gas equivalent is 145 kWh a day (about 4,397 kWh a month).
What it is
"De minimis" means "too small to bother with". For VAT, HMRC treats very small amounts of fuel as if they were for domestic use, so they get the 5% reduced rate. The figures are set out in HMRC VAT Notice 701/19: fuel and power.
| Fuel | Per day (average) | Per month |
|---|---|---|
| Electricity | 33 kWh | 1,000 kWh |
| Piped gas | 145 kWh | 4,397 kWh (about 150 therms) |
Key points
- It is measured per customer, per premises, as an average.
- It does not apply to electric vehicle charging at public or workplace chargers.
- It applies to VAT. The Climate Change Levy has similar monthly limits (1,000 kWh electricity, 4,397 kWh gas), as set out in GOV.UK CCL exemptions.
Worked example
A small hairdresser's shop used 9,600 kWh of electricity last year. Daily average: 9,600 ÷ 365 = 26.3 kWh, which is under 33. So the supply qualifies for 5%.
Compare a café using 18,000 kWh: 18,000 ÷ 365 = 49.3 kWh, over the limit, so 20% applies.
Money effect for the salon, if its annual net bill is £2,700 (9,600 kWh at about 28p/kWh): 20% = £540 against 5% = £135, a difference of £405 a year. From 1 October 2026 to 30 June 2027 the qualifying electricity in Great Britain is zero-rated instead, because the temporary zero rate follows the same eligibility (HMRC first announced 31 March 2027 as the end date; Budget 2026 extended it). For those months the salon would pay no VAT on its electricity instead of 5%; see zero VAT on electricity.
What if you go over some months?
The test is based on average use, not a single month, but seasonal swings can push an average over the line. If you are close, ask your supplier how it applies the test and keep records of your readings. Our VAT and CCL calculator helps you check.
How to claim it
You usually need to tell your supplier. See the reduced-rate declaration. If you were charged 20% and qualified, ask for a correction and a credit: refunds and credits.
Convert gas meter units first if your readings are not in kWh: gas units to kWh converter.
Why the limit exists
The idea is that a household-sized supply should not be taxed as a business one just because the meter sits in a commercial unit. A lock-up garage with a light, a small storage unit or a rarely used office will often sit well under the limit, while a shop with fridges or a kitchen will not.
Quick reference by business type
- Likely under 33 kWh a day: storage units, car-park lighting, a one-person studio with a laptop and heater, an unheated village hall used a few hours a week.
- Likely over: cafés, hairdressers with dryers, offices with several staff, anything with commercial refrigeration or electric heating through winter.
These are only rules of thumb; your own meter readings decide.
Next steps
- Divide your annual kWh by 365.
- Compare with 33 (electricity) or 145 (gas).
- If under, send your supplier a declaration.
Sources
General information only. Energy prices, rules and supplier terms change; check the latest position with your supplier, Ofgem or the Energy Ombudsman before you act.