At the time of going to press the petition has 10’500 signatures – but needs 100’000 to be considered for debate in Parliament.
Despite the UK Governments commitment to be net-zero by 2050, HMRC intends to comply with EU law and remove the reduced rate of 5% VAT on solar installation costs from October 1st this year.
If this change comes into force the cost of installation will be charged at the full 20% rate, but only when the cost of the materials exceeds 60% of the total cost of the installation.
The new amendments will:
• Maintain the reduced rate on all installations of energy-saving materials for recipients who are aged 60 or over, on certain benefits, for relevant housing associations, and where the installations are in buildings used for relevant residential purposes such as care homes and children’s homes
• Remove the reduced rate for the installation of wind and water turbines.
• Maintain the reduced rate for all other installations of energy-saving materials in residential accommodation where the cost of the materials does not exceed 60 per cent of the total cost of the installation.
Solar only installations may not be affected as most will fall under the 60% threshold, however, installations with battery storage and ones using more premium materials are more likely to be subject to the standard rate of VAT.
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