Vat On Solar Panels In Uk

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.

Vat on solar panels in uk.

The 5 rate applies to the installation of these items as hmrc s guidance makes clear installation in this context means putting in place energy saving materials adding if. The 5 rate on esms includes the installation of solar panels. Vat and other taxes on shopping and services including tax free shopping energy saving equipment and mobility aids. The government has introduced secondary legislation to amend the scope of the 5 rate to comply with european vat rules si 2019 958.

To help us improve gov uk we d like to know more. The uk government has declared that we are facing a climate crisis but in a somewhat contradictory move is simultaneously proposing a higher rate of vat on solar panels of 20. 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. 2 vat on solar panels.

This legislation was passed on 25 june 2019 the same day the uk house of commons passed legislation to commit the uk to net zero carbon emissions by 2050. Hmrc has announced plans to increase the vat rate on the installation of solar panels in residential accommodation to 20 with effect from 1 october 2019. Changes to the vat treatment of solar panels and other energy saving materials are not as extensive as first feared. At present vat is charged at the reduced 5 rate on the installation of energy saving materials esms including solar panels in residential accommodation.

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. It pays 5 000 for the solar panels and battery excluding vat and charges its customer 7 500 excluding vat for the installation. This follows long standing infraction proceedings against the uk by the european courts who.