# Partial VAT refund (due to a mistake in discount rate calculation) refused

#### Springers

##### Registered User
Hi,

I had a discount of 26% with Electric Ireland until February and got the 10% from there.

The bills that I received in March (for January and February) showed a discount of 10% rather than 26%.

For simplicity of calculation, total of electricity were €1500 before discount:

I was first charged €1500 - 10% = €1350 excluding VAT => €1471.5 including VAT (9%)​
I should have been charged €1500 - 26% = €1110 excluding VAT => €1209.9 including VAT (9%)​
I was overcharged by €1471.5 - €1209.9 = €261.6 including VAT (9%)​

After multiple calls, emails sent and one complaint, I managed to get a refund but only with the difference excluding VAT, ie €1350 - €1110 = €240

They mentioned the discount was applied before the VAT. I then told them that despite the discount was applied before the VAT, I paid excess VAT because the correct discount was not applied. So they should have refund the discount difference before the VAT + excess VAT paid (€21.6 in my case).

As I'm not a native speaker, hope the explanation above makes sense. Now, here are my thoughts:

1- Am I mathematically correct by claiming this partial VAT refund? None of the Electric Ireland agents was able to understand this basic math.​
2- Is it worth spending again hours to claim €21.6? I was not upset by their 1st mistake as human errors might happen but extremely unhappy they closed my complaint without contacting me to get further explanation in regards to the partial VAT refund.​
3- My complaint was closed and I told them that I would contact CRU, am I following the right procedure?​

#### Sue Ellen

##### Moderator.
Is it worth spending again hours to claim €21.6?

No, life's too short. The stress that it will cause you and your own time are worth more than €21.60.

#### Springers

##### Registered User
No, life's too short. The stress that it will cause you and your own time are worth more than €21.60.

Thanks for being straightforward. I should move on rather than being taken over by my ego.

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#### Brendan Burgess

##### Founder
Hi Springers

While I agree with Sue Ellen that you should not waste a huge amount of time pursuing a refund of €21 , it does show that Electric Ireland's systems are wrong if they are not refunding you the VAT on the overcharge. (I didn't study your story in detail, but it looks correct.)

So you should definitely report them to the CRU on the grounds that this must be affecting all other cases where there is a refund.

Then send a copy of your complaint to the CRU to whoever the appropriate person is in Electric Ireland

#### 8till8

##### Registered User
@Springers Electric Ireland have a customer charter and if they breach certain commitments then you can claim €40, you might be able to claim under more than one heading €40, €40, €40 and on and on...

#### peemac

##### Registered User
do you get a physical refund as in money transferred to you bank or have they put a credit on your account? - If a credit on your account it probably is credited before vat calculation.

EG, new bill usage €400, less €200 refund, balance €200, then vat added to give balance €218. (if refund was not given, balance would be €436 - so vat is effectively credited)

If they simply provided a "goodwill gesture" then VAT does not apply to that.

#### Springers

##### Registered User
do you get a physical refund as in money transferred to you bank or have they put a credit on your account? - If a credit on your account it probably is credited before vat calculation.

EG, new bill usage €400, less €200 refund, balance €200, then vat added to give balance €218. (if refund was not given, balance would be €436 - so vat is effectively credited)

If they simply provided a "goodwill gesture" then VAT does not apply to that.

Hi Peemac,

Indeed, they put a credit in my account before vat calculation for the next bill.

"EG, new bill usage €400, less €200 refund, balance €200, then vat added to give balance €218. (if refund was not given, balance would be €436 - so vat is effectively credited)"
=> I agree with this approach as long as we consider that discount rate is the same for the previous and new bills.
In my case, VAT was overcharged (discount of 10% applied rather than 26%) in the previous bill. VAT is indeed credited in the new bill but with a discount of 10%.

As mentioned in my 1st post, I am not claiming a full VAT refund but only partial VAT one, ie the 16% discount difference => total electricity x VAT rate x discount difference rate = €1500 x 9% x (26%-10%) = €21.6

#### peemac

##### Registered User
Hi Peemac,

Indeed, they put a credit in my account before vat calculation for the next bill.

"EG, new bill usage €400, less €200 refund, balance €200, then vat added to give balance €218. (if refund was not given, balance would be €436 - so vat is effectively credited)"
=> I agree with this approach as long as we consider that discount rate is the same for the previous and new bills.
In my case, VAT was overcharged (discount of 10% applied rather than 26%) in the previous bill. VAT is indeed credited in the new bill but with a discount of 10%.

As mentioned in my 1st post, I am not claiming a full VAT refund but only partial VAT one, ie the 16% discount difference => total electricity x VAT rate x discount difference rate = €1500 x 9% x (26%-10%) = €21.6
Forget the vat - it is a fixed calculation. Only look at the ex vat figures. The vat will automatically look after itself.

You' probably need to post exact figures to get an answer as hypothetical figures usually mask an easy explanation.

Also remember that the discount is on the electricity units only - not on the standing charge.

But try this

Number of units multiplied by the unit cost ex vat = xxx. Deduct 10% of xxx = yyy

Then number of units multiplied by the unit cost ex vat = xxx Deduct 26% = zzz

zzz less yyy = the overcharge excluding vat.

Maybe you need to wait until the next bill to see if the vat gets calculated as if they put a €240 credit and it is incl, they would have it showing as a 220.18 credit (240 inc vat)

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#### Springers

##### Registered User
Forget the vat - it is a fixed calculation. Only look at the ex vat figures. The vat will automatically look after itself.

You' probably need to post exact figures to get an answer as hypothetical figures usually mask an easy explanation.

Also remember that the discount is on the electricity units only - not on the standing charge.

But try this

Number of units multiplied by the unit cost ex vat = xxx. Deduct 10% of xxx = yyy

Then number of units multiplied by the unit cost ex vat = xxx Deduct 26% = zzz

zzz less yyy = the overcharge excluding vat.

Maybe you need to wait until the next bill to see if the vat gets calculated as if they put a €240 credit and it is incl, they would have it showing as a 220.18 credit (240 inc vat)
Hi Peemac,

Thanks for the thorough explanation. It does make sense now.

The VAT debited in the previous bill is actually credited in the following bill because of the lower balance.

You have definitely answered to my 1st query:

1- Am I mathematically correct by claiming this partial VAT refund? None of the Electric Ireland agents was able to understand this basic math.
=> I was wrong. I will get back to EI with an apology email.