A change to VAT on solar panels for household electricity and heat, as well as any domestic wind and water turbines, had been proposed from 1st August. According to HMRC, the planned increase in VAT from 5% to 20% was due to a European Commission ruling which had been upheld by the EU Court of Justice.
The NFU disagrees with the Government's assessment that the proposed changes are not expected to have any significant economic impact, and we anticipated that tens of thousands of NFU members' farmhouse solar installations could ultimately be impacted. We do not think domestic solar thermal (water heating) panels should have been included, and we consider these proposals are counter to the wider EU objective of encouraging the uptake of energy efficiency and renewable energy measures.
We call upon Government to re-visit the recent reductions in domestic Feed-In Tariffs, and to look again at the domestic RHI tariff for solar water heating.
This consultation closed on Wednesday 3rd February. Read the HMRC consultation document here (opens in a new window). NFU members can download and read our consultation response here.