RHI exempt income tax?

[BruceB]

I believe from various announcements that income from RHI in domestic circumstances is expected to be exempt from income tax in the same way as FIT/export tariff.  Has this been enacted in legislation yet?

[dhaslam]

It shouldn't need legislation because  it isn't business income.

[Ivan]

Any money you receive is considered a gain or earnings,  and therefore potentially taxable unless exempt in some form. Let's hope the RHI gets the same tax treatment as the FITs

[Ted]

I haven't seen anything yet. It would presumably feature in the Finance Bill 2013 but there is nothing for RHI in the latest draft AFAICS. The present exemption for FiTs expressly states it is for electricity generation so doesn't cover RHI.

@dhaslam, your approach would put hundreds, if not thousands, of civil servants and accountants out of a job and that would never do. 

[BruceB]

Thanks.  I am in the unusual position of already getting rhi for domestic (district heating) and am hoping not to have to include it in my tax return to 5/4/13.

[Ivan]

Bruce, if your RHI is commercial (which it has to be if you're being paid it already), then it won't ever be tax-free, as businesses have never enjoyed tax free FITs - so nor will they enjoy tax free RHI

[BruceB]

I reckon that in due course it will for income tax purposes be considered domestic because it is for a domestic old mill which has a granny annex. Because of the granny annex, although it is one building, it now has 2 council taxes and therefore falls into the district heating and therefore commercial part of the RHI scheme.  If hmrc tried to say it was not part of my domestic arrangements then arguably that would make it a business, which hmrc would not want or wear because that would bring with it the ability to claim CAs on the whole cost etc.  The reality is that it is not a business, it is my home heating.  So my money is on that it all falls within normal domestic arrangements for income tax purposes although within the commercial part of rhi scheme.

We will see whether I get bitten on the backside in due course.  It is a bit disappointing that the exemption I was asking about is not in the current set of Finance Bill 2013 draft clauses, because that was the mechanism that got s782A (the microgeneration exemption) inserted in the ITTOIA 2005 by the Finance Act 2007.

[renewablejohn]

Sorry Bruce but you dont stand a chance getting away with that as domestic. Dont think that HMRC apply logic they dont have to. All they will do is make an assessment then it is up to the homeowner to justify why the assessment is not valid. Basically you are guilty and you have to prove your innocence.