The changes are set to come in from 1 October
- HMRC has proposed a price hike for a number of sustainable energy sources
- Prices would be higher, going from 5% to 20% VAT
HM Revenue and Customs (HMRC) is set to introduce higher VAT rates for the installation of a number of renewable and sustainable energy sources, such as solar panels and biomass boilers.
The government body responsible for collecting taxes, announced a hike in rates from 5 per cent to 20 per cent for machinery costs when the technology costs of installation are above 60 per cent.
Previously, households that chose to install solar photovoltaic (PV), battery storage or biomass boilers, benefited from a reduced VAT rate of 5 per cent, however their material costs are higher than the new limit.
The changes are set to come in from 1 October.
Exceptions to the legislation, for which the 5 per cent VAT will still be available, are for residential installations for recipients aged 60 or over or receiving certain benefits, and for housing associations.
Read more: iNews