Updated on 07/03/25 by Chris_OVO
We’re correcting the way we calculate your VAT for your Power Move discounts. This is because we made a mistake – and undercharged you. You won’t need to pay anything back, but we want you to know what the change means for you.
Here’s how we fixed things and what this means for your bill.
We’re really sorry. We had been calculating your VAT charge incorrectly for your Power Move discounts, meaning you were undercharged.
You won’t be charged for any underpaid VAT
From your next energy bill (August credit being paid in September) the calculations will be right and there’s nothing you need to do.
Here’s what happened
Normally, VAT should be calculated as 5% of your total energy costs. Instead, we were deducting your Power Move discount and then applying the VAT.
What this means for your bills
Here’s an example of what VAT you’d pay if your total energy cost was £50. Below, you can see how the steps for our calculation will change.
| Old calculation | New correct calculation |
| Step 1 Total energy cost = £50 Step 2 Minus Power Move discount £50-£10 = £40 Step 3 Apply VAT at 5% = £40 x 0.05 = £42 Final total: £42 VAT charge: £2 | Step 1 Total energy cost = £50 Step 2 Apply VAT at 5% = £50 x 0.05 = £52.50 Step 3 Minus Power Move discount £52.50-£10 = £42.50 Final total: £42.50 Correct VAT charge: £2.50 |
As this table shows, an extra £0.50 VAT is charged on the bill that is calculated correctly. Remember, you won’t be billed for any undercharged VAT. This table is to show how the correct calculations are done going forward.
Thanks,
The OVO Team
