Solar PV installation - tax query
Solar PV installation - tax query
We’re thinking about solar photovoltaic installation for both our house and our barn conversion next door. The barn conversion is a holiday let (it only has planning permission for a holiday let, not a permanent residential dwelling). I know that the feed-in-tariff income (FiT) for the house installation would be tax-free, but I’m not sure about the FiT income for the barn. I’ve done some serious googling and some sites are saying that businesses have to declare their FiT income and pay tax on it, but many other sites are saying that for landlords FiT income is tax-free. Does anyone receive any FiT income for their properties and if so, how are you dealing with the tax issue?
We are going ahead with a PV system here at Chateau Barton early next year hopefully - providing I can get listed building consent!
I posed this question to my accountant recently He has told me that the FIT income for my holiday cottages and farm should be declared as income. However, I can claim an element of FIT income (the same percentage as I currently allow for consumption of oil, electricity, water etc - currently about a third of the total bill) for my personal accommodation and that proportion will be tax-free.
He is going to check this out though and I'll let you know if he finds out anything different.
Have you asked your own accountant?
I posed this question to my accountant recently He has told me that the FIT income for my holiday cottages and farm should be declared as income. However, I can claim an element of FIT income (the same percentage as I currently allow for consumption of oil, electricity, water etc - currently about a third of the total bill) for my personal accommodation and that proportion will be tax-free.
He is going to check this out though and I'll let you know if he finds out anything different.
Have you asked your own accountant?
If you want to find me, Google The Barton Poughill!
Yes, I finally managed to get through to the accountant and yes, he also says that the income will be taxable. The installation costs qualify for capital allowances though, so I think a significant amount of the tax should be able to be offset (although I never really understand capital allowances).
Good luck with the listed building consent - we're also listed, but our roof wouldn't be suitable for solar pv (too many ridges and valleys) so we're going to try for a ground-mounted system in a field. We just have to work out how to keep the cows off it . . .
Good luck with the listed building consent - we're also listed, but our roof wouldn't be suitable for solar pv (too many ridges and valleys) so we're going to try for a ground-mounted system in a field. We just have to work out how to keep the cows off it . . .
We're installing three separate PV systems, all sub 3.5, on both of my cottages and the farmhouse. This also means that any work required on the overhead cables and junction box will be the responsibility of South West Power, not us as we are not exceeding their single system limit (IYSWIM)
Two of our systems will be ground mounted (I'm currently trying to persuade DEFRA that PV cells are a cover crop so I can still get single farm payment for the fields they are in - I am hoping to put my sheep in there to keep the grass down rather than mowing!) and one is to be mounted on the roof of a Grade II listed barn.
Do you have two separate electricity supplies? If so, you should consider two separate systems - I've calculated that we will generate quite a lot of surplus electricity for our empty weeks in the cottages and that will off-set anything we take from the grid on the house and farm and should also generate extra profit.
Just a thought .....
Two of our systems will be ground mounted (I'm currently trying to persuade DEFRA that PV cells are a cover crop so I can still get single farm payment for the fields they are in - I am hoping to put my sheep in there to keep the grass down rather than mowing!) and one is to be mounted on the roof of a Grade II listed barn.
Do you have two separate electricity supplies? If so, you should consider two separate systems - I've calculated that we will generate quite a lot of surplus electricity for our empty weeks in the cottages and that will off-set anything we take from the grid on the house and farm and should also generate extra profit.
Just a thought .....
If you want to find me, Google The Barton Poughill!
All the suppliers we've looked at (3 or 4) have been able to quote for ground mounted systems as well as roof mounted, although nearly all their actual installations have been roof mounted. We're having more difficulty with the planning side of it as we're a listed building and the land we want to put the panels on is agricultural land - it seems to be a much easier process if it's a roof mounted system. I can let you have details of our suppliers if you want to pm me, but they're all local to Hebden Bridge so I'm not sure how much use they'd be to you.
We have looked at PV for our new project but we may not live long enough to pay back our investment! The panels only have a life of 20 years and it's a minimum of 10 years to get your money back (and that is at the subsidised rates EDF are paying). Great idea but at the moment too costly and not supportable by EDF long term . Heat exchangers are better we feel.
Thanks Enid - useful information. When having our barn conversion done we decided on ground source heat pumps for heating. It was a big decision, which would now be a no-brainer.
We considered a wind turbine for generating electricity, but the costs were ridiculous (£30k - 50k for anything worthwhile) and the payback time was infinite; ie the equipment would reach the end of its working life before it had paid for itself. Much the same as the full size things that appear on hillsides. There's no real sign of technology improvements that will make the things viable.
PV panels at that time (say 4 years ago) weren't a real-world option as the technology was in its infancy, needing vast surface area at enormous cost for any useful output, but the technology has moved very fast, and is probably still moving. How long before the cost and surface area per kW makes a PV panel installation a no-brainer? Crystal ball, anyone?
We considered a wind turbine for generating electricity, but the costs were ridiculous (£30k - 50k for anything worthwhile) and the payback time was infinite; ie the equipment would reach the end of its working life before it had paid for itself. Much the same as the full size things that appear on hillsides. There's no real sign of technology improvements that will make the things viable.
PV panels at that time (say 4 years ago) weren't a real-world option as the technology was in its infancy, needing vast surface area at enormous cost for any useful output, but the technology has moved very fast, and is probably still moving. How long before the cost and surface area per kW makes a PV panel installation a no-brainer? Crystal ball, anyone?