VAT rate for landlord recharging individual flats with individual meters

The landlord pays 20% VAT for electricity in a block of 214 flats and recharges based on individual meters for each flat still at 20% and NOT at the reduced rate of 5%. The say that HMRC have told them to do this. Is this correct?

Why is the landlord paying 20% VAT on domestic electricity? Domestic electricity is 5% reduced rated. If each flat has an individual meter, then why are the utility companies charging 20% VAT on a supply that is clearly being made to a domestic property? I doubt HMRC advised the landlord on any of this. When a landlord charges his tenants specifically for the provision of utilities such as electricity/gas/water and charges for each tenant’s actual consumption, it is a separate transaction outside that of the rent (rent is always exempt). The tenant is seen as buying their utilities from the landlord separate to their rental agreement. A landlord is entitled to a deduction for input tax on the purchase of utilities to the extent that such a utility is resold as a separate taxable item. The supply of domestic electricity is 5%. Suspect landlord is just recharging to tenants what he himself has incurred, so if he is being charged £100 + 20% VAT by the utility provider then he will recharge £100 + 20% to the tenant and he is not out of pocket, so it might be the problem lays with the utility supplier who is charging wrong rate of VAT to the landlord. This is one for the tenants association/service charge company to deal.

Hi RayGolding,
Please see section 12.3 of the guidance below:
Land and property (VAT Notice 742) 10. Supplies between landlords and tenants
Thank you.