Do I have to pay tax on solar panels?

Normally, you won't get charged VAT or income tax on this payment if you produce electricity primarily for your own home. However, for businesses and commercial properties, the money made from solar panels, including feed-in tariffs, might be subject to taxes.

How are solar panels taxed in the UK?

The way solar panel income is taxed in the UK varies based on installation and usage. If you have a domestic installation and are signed up to an export tariff (e.g. like the Smart Export Guarantee), you'll get paid for the surplus electricity you send back to the grid.

Do I have to pay income tax if I generate electricity?

Where the generation tariff is received by an individual, other than in a business capacity, and it is not chargeable as miscellaneous income, no Income Tax liability will arise. This will usually be the case where an individual generates electricity mainly for use in their own home.

Are electrical installations tax-free?

So as long as the installation doesn’t generate far more electricity than is used in the home overall, the income should still be tax-free. However, businesses will not be able to enjoy the tax exempt status available to homeowners. They will be taxed according to normal principles.

What information is included in a solar panel tax report?

The report also gives some information relating to VAT on solar panels and Feed-in Tariff. Important notice The above report is given as generally and publically available information not as tax advice.

Are domestic installations taxable?

Any income from a domestic installation at one’s home is tax-free. This includes both sales of exported electricity and any Feed in Tariff Any income from a domestic installation at a let dwelling is taxable (even though capital allowances are denied).