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Independent Not owned by any fuel supplier Suppliers 83 named UK suppliers listed Coverage 84 counties and 493 towns VAT 5% applies to domestic heating oil Independent Not owned by any fuel supplier Suppliers 83 named UK suppliers listed Coverage 84 counties and 493 towns VAT 5% applies to domestic heating oil

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What VAT Do You Pay on Heating Oil?

Domestic heating oil is charged VAT at the reduced rate of 5%. Deliveries of 2,300 litres or less get it automatically. Above that, home heating stays at 5% with a domestic-use declaration; only non-domestic use pays 20%. Enter your order below to see the VAT rate and, if you add your price, the totals.

Your order

Litres in one delivery3,000L

500L2,300L threshold5,000L

Price per litre, ex VAT (pence, optional)

Use the price from your latest quote or invoice to see the totals. Leave blank to see the applicable rate only.

Use type

Your VAT rate

Applicable rate

on 3,000 litres, domestic use

Enter a price per litre on the left, from your latest quote or invoice, to see the total at this rate and the difference between 5% and 20%.

Domestic heating oil stays at 5% even above 2,300 litres, but the supplier will usually ask you to sign a domestic-use declaration for the qualifying quantity.

A worked example

Say you order 3,000 litres in one delivery to fill a large tank before winter. Because 3,000 litres is above the 2,300 litre threshold, the use type now decides the rate.

If this is oil for a home, it is qualifying domestic use, so it stays at 5% VAT. The supplier usually asks you to sign a short domestic-use declaration. If instead the oil is for a business, it is standard rated at 20% VAT. So the same 3,000 litres can carry either rate depending only on how the fuel is used, not on the volume alone. Enter your litres and price in the calculator above to see the pounds either way.

For mixed premises above the threshold, the 60% rule applies. If at least 60% is for qualifying use, the whole supply is 5%. Below that it is apportioned. At 40% qualifying, this order would be charged a blended 14.0% VAT rate.

VAT rate by order size and use

Domestic and charity non-business use stays at 5% at any volume; the commercial column shows what non-domestic use pays.

Litres in one delivery	Domestic rate	Commercial rate
500L	5%	5%
1,000L	5%	5%
2,000L	5%	5%
2,300L	5%	5%
3,000L	5%	20%
4,000L	5%	20%

Rows shaded amber are above the 2,300 litre threshold. Note that domestic home heating stays at 5% on every row: only non-domestic use moves to 20% above the threshold.

How this is calculated

domestic use:   rate = 0.05 (5%) at any volume
commercial use: rate = litres > 2300 ? 0.2 (20%) : 0.05 (5%)
mixed use > 2300L: qualifying_share >= 0.6 ? 5% whole supply
                     : apportion (share x 5% + rest x 20%)
total = litres x ppl / 100 x (1 + rate)

vat_domestic                    = 0.05  (5%,  verified 2026-07-28)
vat_standard                    = 0.2  (20%, verified 2026-07-28)
vat_threshold_litres            = 2300 litres per delivery (de minimis)
vat_mixed_qualifying_threshold  = 0.6 (60% rule, HMRC VAT Notice 701/19)

Figures used on this page

Figure	Value	Source	Verified
vat domestic	0.05 ratio	VAT Act 1994 Schedule 7A Group 1, domestic fuel reduced rate	2026-07-28
vat standard	0.2 ratio	VAT Act 1994, standard rate	2026-07-28
vat threshold litres	2300 litres	HMRC VAT Notice 701/19, de minimis limit for domestic use presumption	2026-07-28
vat mixed qualifying threshold	0.6 ratio	HMRC VAT Notice 701/19: where 60% or more of a mixed-use supply is for qualifying use, the whole supply is reduced-rated; otherwise it is apportioned	2026-07-28

What affects the result

The size of a single delivery. The threshold is per delivery, not per year. Up to 2,300 litres in one drop is reduced-rated at 5% automatically, whatever the use. Above that, the use type decides the rate rather than the volume on its own.

Whether the use is domestic. Fuel for a home, or for a charity non-business activity, is qualifying use and stays at 5% at any volume. Fuel for a business, farm office or commercial premises is standard rated at 20% once the delivery is over the threshold.

Mixed use and the 60% rule. For premises with both domestic and non-domestic use above the threshold, if 60% or more of the fuel is for qualifying use the whole supply is reduced-rated. Below 60% it is apportioned, with the qualifying share at 5% and the rest at 20%.

This is general guidance, not tax advice. The rates, the 2,300 litre limit and the 60% rule come from HMRC VAT Notice 701/19. For an unusual situation, check with your supplier or an accountant before ordering.

VAT threshold checker FAQs

What VAT do you pay on heating oil?

Domestic heating oil is reduced-rated at 5%. Deliveries of 2,300 litres or less get 5% automatically. Larger deliveries for home heating also stay at 5%, usually with a domestic-use declaration. Only non-domestic use is standard-rated at 20% above the threshold.

What is the 2,300 litre VAT rule?

HMRC treats any delivery of 2,300 litres or less as domestic, so it is reduced-rated at 5% automatically, whatever the use. Above 2,300 litres the use matters: qualifying domestic or charity use is still 5%, other use is 20%.

Does a household pay 20% on a large order?

No. A home ordering more than 2,300 litres for heating still pays 5%. The supplier normally asks for a simple domestic-use declaration on the qualifying quantity. The 20% rate is for business or other non-qualifying use, not ordinary home heating.

How does mixed domestic and commercial use work?

For a supply above 2,300 litres, the 60% rule applies. If 60% or more is for qualifying use, the whole supply is 5%. If less, it is apportioned: the qualifying share at 5% and the rest at 20%. Below 2,300 litres it is always 5%.

How much difference does 20% instead of 5% make?

On a supply above 2,300 litres, non-domestic use at 20% costs three times as much VAT as the domestic 5% rate on the same order. Enter your litres and price in the calculator above to see the exact pounds for your order. That gap is why confirming your use type matters on large orders.