An island resident has spoken of his frustration with Isle of Man Energy after being overcharged £140 on his latest gas bill.

Sean O’Connell, 60, was mistakenly charged 20% VAT instead of the standard 5% - an error that also hit more than 500 other customers, approximately 2% of the company’s domestic accounts.

The Douglas-based gas supplier has blamed the issue on a fault in its billing system, which led to some domestic users being wrongly billed at the commercial VAT rate.

Mr O’Connell said he became aware of the discrepancy after noticing that his latest bill was significantly higher than usual and examining the breakdown of charges more closely.

He said: ‘They didn’t seem too interested in my issue, and I was told there’s a fault in the system where, when a bill goes over a certain threshold, the VAT rate on the bill is automatically charged at the 20% commercial rate.

‘That response suggested to me that they were fully aware of the issue but seemed reluctant to put it right. In any other world, in my opinion, this would be considered a scam.

‘This company has a monopoly on gas supply on the island, at what most people consider to be an exorbitant rate.

‘The additional 15% VAT charge to consumers seemed to be of no concern to them whatsoever.

‘I had no communication from the company to inform me of the error, and I’m convinced that had I not contacted them directly, I would have been left out of pocket.

‘My concern is not just for me, but for others - especially vulnerable people - who may not even realise they’ve been charged incorrectly.’

Mr O’Connell’s supply charges before VAT came to £927.56. He was charged £185.51 in VAT, when the correct amount should have been £46.38 - an overcharge of £139.13 that pushed his total bill over the £1,000 mark.

He added: ‘They don’t care about their customer base in the Isle of Man.

‘There’s no way to speak face-to-face with anyone about problems like this, and the person I spoke to on the phone just didn’t seem interested or capable of helping.’

Customers began raising concerns about the issue on Friday (April 4), prompting Douglas Central MHK Chris Thomas to step in after receiving a number of enquiries from constituents.

Mr Thomas said: ‘I was pleased to hear that both the VAT office and Isle of Man Energy were urgently reviewing the relevant VAT notice. I expect any errors to be resolved without delay and for billing to be corrected swiftly and fairly.’

Later that day, Isle of Man Energy issued a public apology and confirmed that all affected customers would be reimbursed in full.

A spokesperson for the company said: ‘We are aware that just over 500 domestic customers (just over 2%) have been charged the standard rate of VAT instead of the reduced rate.

‘We are sorry for any inconvenience this may have caused and thank the small number of customers affected for their understanding and patience.

‘Corrections will be applied automatically to all affected accounts, showing as a credit on customers’ next bills.

‘As a gesture of goodwill, we will also issue a £10 payment to each impacted customer. There is no need for customers to take any action.’