Go into profit on your fuel bill

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PAYING your fuel bills in advance is the safest investment on the market. Customers save far more money by avoiding VAT, which is imposed on domestic bills from Friday, than they could earn from interest on any bank or building society account.

And if you want the money back, because of an emergency or if there is a sharp rise in interest rates, there is no problem. The energy companies will refund unused credit on demand, the Independent on Sunday can reveal.

Millions of people have already withdrawn money from bank and building society accounts to pay domestic electricity, gas, coal and oil bills for months or even years in advance. By doing so, they avoid VAT, levied at 8 per cent from Friday, and at 17.5 per cent from April, 1995.

According to calculations by Ernst and Young, the accountants, most taxpayers will gain if they pay their bills at least two years in advance, provided they have the cash. For a higher-rate taxpayer, the return over two years is equivalent to more than 29 per cent.

Some people have hesitated because they prefer instant access to their cash. But the fuel companies can provide that, too. In effect, the companies have become bankers, offering easily the best rates of return available.

Anybody who has not already pre-paid their bill must hurry. A cheque paid in tomorrow would probably take too long to clear. Most companies advise visiting a showroom or billing centre and paying cash before Thursday night.

Full story, page 4