Gas

This Overheads code records the cost of gas incurred in running the business. As an expense account, it normally carries a debit balance: debit entries increase the balance (recording new costs) and credit entries decrease it (for example, correcting an error or a refund received).

Real-world examples

Restaurant or catering

A busy restaurant kitchen running commercial ranges, ovens and a hot-water system on mains gas gets a bill of £480 (£400 net) for the quarter — usage is far higher than a typical office because the cooking load runs most of the trading day. The entry is a debit of £400 to 7201 (Gas), a debit of £80 to 2201 (Purchase Tax Control Account), and a credit of £480 to 2100 (Creditors Control Account).

Small retail or office

A small shop with just a wall-mounted heater and negligible other gas use falls under HMRC's de minimis threshold for fuel and power — broadly, average use below around 4,397 kWh a month qualifies automatically for the reduced 5% VAT rate rather than 20%. A £52.50 bill (£50 net, £2.50 VAT) is a debit of £50 to 7201, a debit of £2.50 to 2201, and a credit of £52.50 to 2100 — worth checking the rate actually charged rather than assuming 20%.

Professional services (serviced office)

A consultancy renting a desk in a serviced office typically never sees a gas invoice at all — heating is bundled into the monthly service charge and posted to 7100 (Rent) instead. Code 7201 only comes into play if the business leases premises directly and holds its own gas supply contract, which is uncommon for a small office-based operation.

Commonly confused with

Because code 7200 (Electricity) sits right next to this one in Overheads, it's a common mis-posting target. Code 7201 is specifically for gas, while 7200 covers electricity — similar in nature, but keeping them separate is what makes the overheads section of your management accounts meaningful rather than a single lumped total.

What a mis-posting here costs you

An error posting to Gas won't change total overhead spend, but it will distort the overheads breakdown that's usually reviewed line by line each month to spot cost creep.

Other codes in Overheads