This is a complicated issue, but we give a brief overview here

Charities have to pay VAT on supplies of fuel and power. However charities can claim the reduced rate where fuel and power is supplied for a qualifying use. Qualifying use means either:

• supplied for use in a dwelling or certain other types of residential accommodation, such as a children’s home, hospice or care home for the elderly or disabled
• supplied for use in charitable non-business activities, such as free day care for the disabled

Additionally, deliveries of certain small quantities of fuel and power are automatically treated as being for a qualifying use. For example, electricity supplied at a rate not exceeding 1000 kilowatt hours a month or a delivery of not more than 2300 litres of gas oil, will qualify for the reduced rate whatever the use of the building.

If the fuel and power is supplied partly for a qualifying use the supplier may have to apportion the supply. Charities should provide the supplier with a certificate declaring the percentage of the fuel and power that will be used for a qualifying purpose.

You can find more detailed information here