Renewables and Tax

Sheila Robertson (BMR director)Gall Robertson CATweedside ParkTweedbank TD1 3TETel: 01896 751050Email: sheila@gallrobertsonca.co.uk

Two renewable energy sources on site:

• Solar panels• Biomass boiler

Taxes

• Capital cost• VAT• Income

Capital expenditure

Capital allowances– Annual Investment Allowance• Currently £500,000

– Enhanced Capital Allowance energy scheme• 100% First year allowance BUT• Not available if tariff payments received under Feed in

Tariff or Renewable Heat Incentive

– Writing Down Allowances• Solar panels have special rate capital allowance 8%

Domestic power generation

• Installed at or near your domestic premises• Electricity generated will not significantly

exceed the amount consumed (by more than 20%)

• 5% VAT is charged by supplier on panel supply• No income tax on feed-in tariffs

VAT• VAT at standard 20% on commercial

equipment supply• Is there a private use restriction - e.g. 2/3

VAT and Income

Supplying fuel or power for –domestic use – 5%–Mixed supply

– if 60% qualifying then all at 5% - apportion if not

– Electricity less than 1000 kw hours per month then all at 5%

VAT and Income (cont)

Feed in Tariff – generation tariff no VAT– Export tariff output VAT

Cottages - landlord• unmetered - exempt –integral part of main supply of

accomodation• Metered – 5%• Impact on exempt income for partial exemption rules