Vat On Solar Panels

This took effect from 1 october 2019 although the government has stated that the majority of solar.

Vat on solar panels.

The vat hike on materials for solar panels and also battery storage came as the government s official advisory body on climate change recommended the uk reaches net zero fossil fuel emissions. Hm revenue and customs hmrc is set to introduce higher vat rates for the installation of a number of renewable and sustainable energy sources such as solar panels and biomass boilers. At present vat is charged at the reduced 5 rate on the installation of energy saving materials esms including solar panels in residential accommodation. Following infraction proceedings by the european commission against the uk in 2015 hmrc published a consultation on proposed changes to the vat treatment of energy saving materials.

Changes to the vat treatment of solar panels and other energy saving materials are not as extensive as first feared. It pays 5 000 for the solar panels and battery excluding vat and charges its customer 7 500. The government has introduced secondary legislation to amend the scope of the 5 rate to comply with european vat rules si 2019 958. This is a subject that crops up periodically usually when we are quoting for solar panels for a non vat registered business.

Value added tax consolidation act 2010 vatca 2010 ref. Hmrc pushes steep vat increase for new solar battery systems this article is more than 1 year old. Our government is so far standing their ground and the rate has remained. Vat and other taxes on shopping and services including tax free shopping energy saving equipment and mobility aids.

Vat registered organisations can claim the vat back on their quarterly returns but for others it does increase the cost of solar panels. For example a business carries out an installation of solar panels combined with a battery. The eu does not agree that solar panels and other renewable products should be charged a lower rate of tax.