Zero rate of VAT for solar panel products

Hi, if the installer completing the qualifying PV and battery installation is not VAT registered how would this work? Would they be charged VAT by the wholesaler on the equipment or not, and if so would they be able to reclaim that even if they're not VAT registered? If not, would they pass that VAT charge on to me as the customer, and if so can I claim that back from HMRC somehow even if I'm not VAT registered? Could it be used to offset personal income tax or a Registered Partnership's tax liability? Sorry for multiple questions, thanks!

 

Hi. If the installer is not VAT registered then he will be charged 20% for the materials when he purchases them and he will have no ability to recover this VAT as he is not VAT registered. As the installer isn't VAT registered then VAT can't be charged by the supplier but you fill find that he will will pass on the VAT cost incurred by him on his purchase. This isn't VAT however as he is not VAT registered,it is just his cost that he is passing over to you and so there would be no procedure to be able to recover this. Thank you.

Hi, I'm the Chair of a Community Amateur Sports Club (CASC) Cricket Club. Our electronic scoreboard is currently powered on grid via 100M extension cable. To tackle climate change we are looking to install a solar panel and battery system onto the roof and into the score box. Can you please clarify the VAT rate for the installation. Our ground is owned by the Town Council. Thank-you

Hi Could you please advise if Scaffolding hire for Solar panel installation is to be charged with VAT? Thank you 

What rate of vat applies to the supply and fitting of an upgrade to an existing solar installation. Upgrade in this case would be inverter, panel optimisers and storage battery.

Hi
 

hitchenaimee ,   The installation of the solar panels can be residential if installed in to a residence but this will not include the hire of scaffolding as this in itself is not a supply of energy saving materials  . Thank you.

Iain Cottingham,

 

Hello the zero rate only applies to residential properties please refer to section 2: Energy-saving materials and heating equipment (VAT Notice 708/6)   . Thank you.

Klotts ,   Hello the zero rate only applies to a new installation , Thank you.

We install solar panels/batteries in England and follow advice to charge 20% for commercial or stand-alone batteries and 0% for domestic solar pv installations. What is the VAT treatment for a charity, for example installing on a local village hall which has charity status? Is this also 20%. Are there any non-domestic settings where 0% may be applicable? Thanks.

Hi LindaK1975,

The 0% relief for installations of energy saving materials is only for installations in to residences listed below:

2. Installations of energy-saving materials

Thank you.

Hi, I am having a new installation of solar panels fitted to my home. The solar company has asked me to organise an electrician to fit/chase the main cable from the loft to the fuse-box due to the extensive decorative woodwork in my 1930s house before they will install. Is installation of this "loft to fuse-box" cable subject to VAT or not? It is part of a solar installation but is not being undertaken by the solar company. If it is not VAT-exempt are there any steps I can take to make it VAT-exempt (letter from solar company saying they require it for example)? Thanks, Jonathan.

Hi Jonathan Burley
The electrician is not providing an installation of enery saving materials and so this wouldn't qualify for the relief.
The solar company can zero rate their supply if they are supplying solar panels in to a residence as long as they meet the criteria here:
Installations of energy-saving materials
Thankyou.
Regards.

We are community group who are recognised as a charity by HMRC. We own a community centre on which we would like to have solar panels installed. Our question is : Because of our charitable status, will we be liable to pay VAT, and if so what rate would that be? Regards, Abacroft.

Hi abacroft,

The installation of energy-saving materials only qualifies for the reduced rate in Northern Ireland or zero rate in Great Britain if they’re for use in types of residential accommodation, such as:

•houses, blocks of flats or other dwellings
•armed forces residential accommodation
•children’s homes
•homes providing care for the elderly, disabled people, or people who suffer or have suffered from drug or alcohol dependency or mental disorder
•hospices
•institutions that are the sole or main residence of at least 90% of their residents
•monasteries, nunneries and similar religious communities
•residential accommodation for students or pupils
•self-catering holiday accommodation
•caravans used as a place of permanent habitation (such as a park home or static caravans sited on a permanent residential caravan park)
•houseboats that are designed or adapted for permanent habitation and have no means of self-propulsion, or other boats which are used as a person’s sole or main residence, such as canal boats and Dutch barges, on which the boat owner pays Council Tax or domestic rates

Thank you. 

I'm a very confused householder! I need to replace 12no solar panels on my house with 8no new panels, due to needing to renew my roof. It makes no sense to pay for a new slate roof to be completed, only to then have a different company clambering all over it to retro-fit solar panels to it, potentially causing damage to the new roof. Nowadays there are integrated solar panel systems available, which will allow the solar company to complete their supply and installation of their panels to the felted roof, before the slating work and necessary flashing work is carried out. The existing panels are not compatible with this type of integrated 'tray' system, so new solar panels need to be installed. Due to the existing FIT contract, the installation's generation capacity cannot be increased, and so only 8no new (larger and more efficient) panels are required in place of the original 12no panels. I have two quotes from MCS-approved contractors for the supply and installation of these new panels to my new roof; one quote includes VAT at 20%, and the other is zero-rated. Which is correct please? Thank you in advance.

Hi LanceP.

The installation of energy saving materials on their own can be zero rated.

However if the installation of the energy saving materials are completed as a single supply with another service/constuction taking place then the installation can be seen as being ancillary to the main supply of construction services.

If this is the case all the work will be 20%

You can find more information in the link below to establish with the supplier(s) whether single or multiple supplies are taking place.

2. Installations of energy-saving materials

Thank you.

Thank you, HMRC Admin 5. For the benefit of other readers / contributors, I hope it's helpful if I provide some further clarification and confirm my conclusion, in case anyone else is in a similar position... My MCS-approved contractor will only be supplying and installing solar panels. The roofing work will be carried out by a completely different contractor. Therefore I am 100% confident that their work can be zero-rated. I will therefore either select the contractor who has already provided a zero-VAT quotation, or I'll share this thread with the other contractor so that they know and understand that their quotation and invoice should be zero-rated. This has been a very helpful exchange, thank you.

Hi, I am setting up a business for solar panels. On a quote I will be charging 0% VAT but I am paying VAT to my suppliers. Is this correct?

We are an established limited company that is going to sell and install PV solar panels and batteries. We intend to subcontract the installation of solar & batteries to a company that will supply and install on our behalf. The contract will be between ourselves and the end customer. Our understanding is that the subcontractor should not charge us V.A.T on either the materials or the installation and in turn we should not charge V.A.T to our customer. Can you please confirm this is correct?

Hi Empoole99,

Yes as they are not installing the panels, the 0% applies to installations further guidance acn be found here:
Energy-saving materials and heating equipment (VAT Notice 708/6)

Thank you.