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Warning. Do you have a Scottish Power smart meter? You're likely to pay 5% more than it shows – check now

If you're a Scottish Power smart meter customer, you're likely to be paying 5% more than it shows on your linked monitor – also known as your 'in-home display' (IHD) – new research from MoneySavingExpert.com (MSE) reveals, so check now.

There are 33 million smart meters in homes across Great Britain; the vast majority work one way, though Scottish Power does things a bit differently. Below we explain what's happening and what you can do about it.

Scottish Power is the ONLY major supplier that doesn't display VAT

Scottish Power is the only one of the nine major suppliers we asked that doesn't display VAT on its IHDs for its credit customers – those who pay by Direct Debit or on receipt of a bill.

On average, it means affected households will need to add an extra 5% to their bills to account for the missing VAT – for those with typical energy use, that's roughly an extra 20p a day if you pay by Direct Debit and about an additional 22p a day if you pay on receipt of bills.

Suppliers don't have to include VAT, charged at 5%, on their smart meter monitors, according to energy regulator Ofgem – though Scottish Power's prepayment meter customers do have VAT included in their IHD prices.

Scottish Power told us it made the change for credit customers in response to customer feedback, though it wouldn't confirm when this came in or how many households it impacts.

It means you need to wait for a bill to see your exact costs

If you're worried about not being able to see VAT on your IHD, you have a couple of options:

  1. Check your bills. Make sure you check your bills carefully to understand how much you're spending and how much VAT is added. Scottish Power adds that if your IHD unit rates do not match what is on your bill, this is normally due to a recent price or product change and you should allow up to seven days for these changes to be reflected on your monitor.

    Scottish Power also has a free app (available on Android and iOS) where you can check your bills, though Scottish Power wouldn't confirm if the app factors in VAT or not.

  2. Consider switching. If having VAT shown on your in-home display is important to you, you could move to a different supplier. When we checked with British Gas, EDF Energy, E.on Next, Octopus Energy, Ovo Energy, So Energy, Utilita, and Utility Warehouse, they all told us VAT is included in IHD prices for all customers (whether they pay by credit or in advance).

    Use our Cheap Energy Club to see all suppliers' available tariffs and to find which is the cheapest deal for you.

If you're struggling to pay your energy bills, check out our full Energy bill help guide for the support currently available.

How smart meters work

Smart meters are designed to help households monitor their daily spend on energy and identify where to  cut usage to save money. They should mean you no longer have to send manual meter readings, and some suppliers also allow smart prepayment meter customers to set automatic top-ups.

Energy suppliers have been mandated to install smart meters into homes across England, Scotland and Wales since 2011. The Government's target is for at least 75% of homes to have a smart meter by the end of 2025.

When your energy supplier installs your smart meter (typically outside your home), you also get a device called an IHD or monitor, which shows your near real-time energy usage in kilowatt hours (kWh) and in pounds and pence. It can also show your current tariff rates and standing charges, past usage, and even budgeting options. Your IHD sits inside your home and is remotely connected to your smart meter. 

If you switch energy supplier, you'll keep the same smart meter and your new provider will remotely update it, alongside your IHD, with your new tariff details. This should happen automatically, but if your unit rates and standing charges haven't updated on your in-home display after switching, give your new supplier a call.

See our Smart meters guide for more info on how they work, including full help getting a replacement IHD if yours is broken.

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