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Author Topic: VAT charge increasing on solar panels  (Read 1420 times)
Mike McMillan
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« on: May 09, 2019, 08:35:57 PM »

Got to love the Tories. Great timing!

https://www.independent.co.uk/environment/climate-change-solar-panels-vat-government-fossil-fuels-sian-berry-a8906361.html

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Off grid; 4KWH install charging Rolls 24v 1000 A.H. batteries with 3 Tristar controllers. 3KW Victron Inverter with FIT meter on output. Relay driver automatically opens circuits as battery charges. 6 x 15 experimental solar collectors feeding 250 L. tank.  Angus wood gasification boiler.
smegal
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« Reply #1 on: May 09, 2019, 10:01:38 PM »


So an increase of ~£11 per panel. Hardly a deal breaker.
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When you’re thirsty, it’s too late to dig a well. - Unknown
Paulh_Boats
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« Reply #2 on: May 09, 2019, 10:09:05 PM »

A VAT rise of 15% on renewable energy is completely irresponsible by any government.

Especially after pulling the plug on PV subsidy, which would logically be replaced with a tax break.
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30 tube thermal,
2.3kW PV see:
http://www.solarmanpv.com/portal/Terminal/TerminalMain.aspx?come=Public&pid=17067

LED lighting in every room
NO tumble dryer, +370 kWh per year
kristen
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« Reply #3 on: May 10, 2019, 06:36:45 AM »

So an increase of ~£11 per panel. Hardly a deal breaker.

And installation cost? including scaffolding the building ... or was that already a 20% component?
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philx
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« Reply #4 on: May 10, 2019, 07:35:17 AM »

Crazy stuff.
The Big Six Energy companies must have very powerful lobbyists.
PhilX
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Paulh_Boats
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« Reply #5 on: May 10, 2019, 09:46:12 AM »

It's bizzarre. Government expects us to abandon petrol and diesel transport.

So a tax break on PV charging of EVs is a logical pro-business policy.
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30 tube thermal,
2.3kW PV see:
http://www.solarmanpv.com/portal/Terminal/TerminalMain.aspx?come=Public&pid=17067

LED lighting in every room
NO tumble dryer, +370 kWh per year
Countrypaul
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« Reply #6 on: May 10, 2019, 12:57:10 PM »

Is this also a case of something being promoted as extremely detrimental whilst actually having a minimal impact?

Any commercial venture will almost certainly be VAT registered and therefore this will have no effect on them.
Anyone doing a self install already pays 20% from what I can tell, the 5% rate only appears to apply to MCS registered installs (can anyone confirm this?).

The section "The changes will apply to projects where the technology costs of installation are above 60 per cent of the total price. Labour costs will still benefit from the reduced rate of 5 per cent VAT." suggests that the PV panels etc. have to amount to more than 60 percent of the project for the higher rate to apply otherwise the 5% rate will still apply.
How much does a 4kWp system cost in "technology", a quick glance at some prices suggests under £2K for the panels, and £1K for the inverter with total costs being in the £5-6K range.

Doesn't that mean as soon as panel (and inverter) prices drop a little further even most 4kWp installs are not going to incur the higher rate VAT anyway? Smaller installations will presumably have a proportionally smaller technology portion and avoid the higher rate already.

Anyone going for a larger install that is not VAT registered is likely to hit the higher rate, but only on the technology. If they do a non MCS install they may well save that anyway  whistlie

Once the goverment sorts out what it is suggesting post FITs (unless this becomes as bogged down as Brexit), presumably things will improve  wackoold

In the short term it certainly sends out the message this goverment is ditching any pretence to be green, no wonder the green party recently did so well.


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RIT
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« Reply #7 on: May 10, 2019, 01:17:20 PM »

The thing this kills off is the combining of PV and battery storage as a combined project which has been eligible for the 5% vat rate as the hardware costs of the battery storage should push the cost of hardware well above the 60% limit.

HMRC only agreed to this VAT rate for combined PV and battery storage back in Aug 2017 so they are pulling a fast one. It also seems that this action is down to HMRC as the government does not seem to have anyone at the wheel at the moment and the claim is 

Quote
“The government is proposing changes which would keep as much tax relief as possible available for Energy-Saving Materials while ensuring UK rules are in line with EU law.”
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2.4kW PV system, output can be seen at  - https://pvoutput.org/list.jsp?userid=49083

Why bother? - well, there is no planet B
ProDave
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« Reply #8 on: May 13, 2019, 06:59:32 PM »

So had we Brexited at the end of March, we would not have had this VAT rise imposed on us by the nasty EU?

Or is that just somewhere convenient to pin  the blame?
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billi
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« Reply #9 on: May 13, 2019, 09:01:40 PM »

Quote
So had we Brexited at the end of March, we would not have had this VAT rise imposed on us by the nasty EU?

Nasty EU ?

  https://www.rte.ie/news/business/2019/0401/1039984-goldman-study-on-brexit/?fbclid=IwAR0XRn__Zn3R34-59016l6E-deC8B3WMOQSWJqs-rs1Au3UbfNqw2Yiho98
Quote
UK economy haemorrhaging £600m a week due to Brexit

well that s a lot of money that could have flown into free energy  for later generations ,  sicking politics   and it will go on
« Last Edit: May 13, 2019, 09:45:41 PM by billi » Logged

1.6 kw and 2.4 kw   PV array  , Outback MX 60 and FM80 charge controller  ,24 volt 1600 AH Battery ,6 Kw Victron inverter charger, 1.1 kw high head hydro turbine as a back up generator , 5 kw woodburner, 36 solar tubes with 360 l water tank, 1.6 kw  windturbine
SnaxMuppet
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« Reply #10 on: July 21, 2019, 03:17:10 PM »

Just looking to get a solar PV/battery system so looking in to this at the moment...

The government seemed to have little choice to putting up the VAT. We were in breach of VAT regulations by not charging at the higher rate and it had been adjudicated against us to implement the higher rate. If we had left the EU with the Withdrawal Agreement then we would still be bound to abide by the EU VAT regulations during the transition period and so we would still have been obligated to increase VAT to the higher rate. I know it goes against the grain when the government has announced a target to go carbon neutral and when VAT remains at 5% on domestic coal, but that is one of the consequences of being in the EU.

Does anyone know exactly when we will need to pay the higher rate? I haven't yet got quotes so it may go down to the wire as to whether we make in before the end of September deadline but I can't find the answer to this...

When is the higher rate to come into effect? Do I have to have the system installed and commissioned before the 1st October to avoid the higher rate or is it when it is invoiced. In other words, could I buy and have it invoiced and paid for before the deadline but have it installed and commissioned after the deadline and still pay the lower rate?
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SnaxMuppet
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« Reply #11 on: July 22, 2019, 07:12:11 PM »

I have been told by an installer that it is when the system is invoiced and fully paid... if that true?
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kommando
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« Reply #12 on: July 22, 2019, 07:14:09 PM »

VAT rates are based on date of invoice. Most companies enter the invoice in the next quarterly VAT return as long as they have been paid, so to make sure it does not carry over to the next quarterly return and look out of place by paying in time so its included.
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SnaxMuppet
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« Reply #13 on: July 23, 2019, 07:41:30 AM »

Many thanks.
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Countrypaul
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« Reply #14 on: July 23, 2019, 09:29:18 AM »

I remember when they first put VAT onto heating oil (1990s sometime), that you could pay the supplier for oil without VAT and they would deliver it next time you needed it, even though the price would be different. Iirc they just invoiced you for £200 or whatever then when you actualy had an order they calculated how much it would be and only charged for any you got in excess of the prepaid amount, with 5% VAT added.  Maybe solar installers can do someting similar.
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