Utility invoice validation: the checks to run on every bill

Utility invoice validation means checking each electricity, gas and water bill against what you already know about the supply before it is posted: the building, the meter, the period, the charges and the VAT. For a managing agent, that comes down to a short list of checks that anyone on the team can run on every bill, in the same order.

Each section below answers one question to ask of a utility bill. For how the bills move through the office in the first place, see how managing agents process utility bills.

Is the bill for the right building and meter?

A utility bill is usually addressed to the managing agent or the client company, so the postal address tells you little. The meter identifier tells you which building and supply the bill belongs to: the MPAN (Meter Point Administration Number) for electricity, and the MPRN (Meter Point Reference Number) for gas. Match it to the one held against the building in your records, then confirm the supply address agrees.

Is this the figure that belongs to this period?

A utility bill can show current charges, a balance brought forward, an instalment amount and a payment slip on the same page. Only the current charges belong to the billing period. The balance brought forward includes earlier charges, so posting it puts a previous period in the accounts twice.

Once the current charges are found, check the arithmetic: net plus VAT should equal the total. A bill where the figures do not add up is worth a call to the supplier before it is approved.

Does the billing period follow on from the last bill?

Each bill for a supply should start the day after the previous bill ended. A gap means a period has not been billed yet. An overlap means some days are being charged twice, or the bill replaces an earlier one. Keeping the last billed date for each supply makes this a quick comparison.

Are the readings actual or estimated?

A utility bill states whether its readings are actual or estimated. An estimated bill is a valid invoice, but its consumption is the supplier’s forecast, and the next actual reading will correct it. Record the read type with each bill. Where an estimate and its correction fall in different service charge years, one year carries cost that belongs to the other.

Does the consumption look right for this supply?

Compare the consumption on the bill with the same period last year for the same supply, and with the previous bill. Communal lighting and plant follow the seasons, so last year’s same months are the fairer comparison. A large change has a cause, such as new plant, a fault, a meter exchange or a reading from the wrong meter, and the property manager will usually know which.

Do the unit rate and standing charge match the contract?

The unit rate (pence per kWh) and the standing charge (pence per day) on the bill should match the contract agreed for that supply. Bills issued after a contract ends, or after a change of supplier, need the closest look. If the rates differ from the contract, it is worth asking your supplier or broker why.

Is the VAT rate right for how the supply is used?

What the electricity is used for decides the VAT rate and whether Climate Change Levy applies, whatever the account is called. A landlord supply on a business account can still be for domestic use.

Electricity from 1 October 2026 to 31 March 2027

From 1 October 2026 to 31 March 2027, electricity for domestic use in England, Wales and Scotland carries 0% VAT (Revenue and Customs Brief 10 (2026); SI 2026/987). Northern Ireland stays at 5%. Gas and heat stay at 5% everywhere. For more, see VAT on communal electricity for managing agents.

Common parts of a block of flats

HMRC treats power for the common parts of a block of flats, such as corridors, lifts and stairways, as domestic use, whatever the amount, where it is supplied to the landlord, managing agent or residents’ association (VAT Notice 701/19, sections 3.2.1 and 10.4). On a purely residential block in Great Britain, a communal electricity bill showing 20% or 5% VAT on use after 1 October 2026 is worth asking your supplier about.

Communal supplies are usually on business accounts, and HMRC notes that many suppliers charge 20% unless they hold a VAT declaration (VAT Fuel and Power manual, VFUP2530). The account holder, usually the client, signs any declaration. Any correction to earlier bills is at the supplier’s discretion.

The de minimis limits

Electricity averaging 33 kWh a day or less (1,000 kWh a month) counts as domestic use, whoever the customer is. The limit counts all the landlord’s electricity at the premises from the same supplier. It is a safe harbour. It is not the test for a residential block, so a communal supply above it can still qualify. The gas limit is 4,397 kWh a month.

Bills that span 1 October 2026

On a qualifying supply, a bill that runs across 1 October 2026 will usually show two rates, split by when the electricity was used, ideally from meter readings. Splitting by days is acceptable where there is no reading (Brief 10). Bills spanning 31 March 2027, when the rate is due to return to 5%, need the same check in reverse. See a utility bill that spans the VAT rate change.

Is Climate Change Levy on a supply that should be free of it?

Climate Change Levy does not apply to electricity or gas for domestic use (VAT Notice 701/19, section 2.8). A qualifying communal supply billed at 20% VAT will usually carry the levy as well, so check the two together. If the levy appears on a bill for the common parts of a residential block, it is worth asking your supplier.

On most residential blocks the VAT on communal electricity cannot be recovered, so it ends up in the service charge, along with any levy. For VAT across the service charge as a whole, see VAT on service charges.

Has this bill been posted before?

Check every utility bill for a duplicate on four fields: supplier, account number, billing period and amount. The same bill can arrive by email and by post, a reminder can look like a new bill, and a supplier can reissue a bill after a re-read with a new number for the same period.

A reissued bill can come with a credit note for the original. Match the credit to the bill it reverses. A supplier statement shows credits that never reached the ledger; see supplier statement reconciliation.

Which fund, schedule and heading does it belong to?

Each bill needs coding to the right service charge fund, schedule and heading. A supply for one block’s lifts belongs to that block’s schedule. Estate lighting may belong to an estate schedule shared by several blocks. Holding each meter against its schedule means the decision is made once.

Are any bills missing at year end?

Utility bills can arrive months after the period they cover, especially after a change of supplier or a disputed reading. At the end of the service charge year, the accounts need an accrual for supply used and not yet billed. The last billed date for each supply turns this into a short list.

Where an accrual covers a period that crosses 1 October 2026 or 31 March 2027, it needs the right VAT rate on each side of the date.

Utility invoice validation checklist

Run these checks on every utility bill, in this order, before it is approved:

1. Match the MPAN or MPRN and the supply address to the building.

2. Take the current charges only, and check that net plus VAT equals the total.

3. Confirm the billing period starts the day after the last bill ended.

4. Record whether the readings are actual or estimated.

5. Compare consumption with the same period last year and the last bill.

6. Check the unit rate and standing charge against the contract.

7. Check the VAT rate against how the supply is used (0% on qualifying electricity in Great Britain from 1 October 2026 to 31 March 2027).

8. Check whether Climate Change Levy is charged on a domestic-use supply.

9. Check for duplicates on supplier, account, period and amount, and match credit notes to reissued bills.

10. Code the bill to the property, fund, schedule and heading.

11. Update the last billed date for the supply, for accruals at year end.

Which of these checks can be automated?

Several of these checks are the same every time, which suits software. Our utility bill processing for property managers reads electricity, gas and water bills with supplier-specific layouts, takes the current charges, and reads supply address, meter, period and consumption, with Climate Change Levy and VAT checked. It codes each bill to the property, fund and heading, and anything uncertain goes to your team with the reason named.

The read type, the comparison with last year’s consumption and the contract rate check stay with your team, alongside decisions such as whether a disputed bill should be paid.