Solar Panels + Battery on FHL

jamgar

Hi

Am looking to install solar panels and a battery into my Holiday Let (had since 2019), is it possible to offset the cost of supply and install against profits for tax purposes?

Thanks in advance

pramsay13

Unlikely as it's considered a capital improvement. 

Nomunnofun1

jamgar said:

Hi

Am looking to install solar panels and a battery into my Holiday Let (had since 2019), is it possible to offset the cost of supply and install against profits for tax purposes?

Thanks in advance

It would be my view that this is a capital expense and, therefore, no!

jamgar

Thanks for the replies, where I am a little confused is it would seem solar specifically falls under and is stated within the 50% special rate first year allowance

Reference:
https://www.gov.uk/government/publications/capital-allowances-and-balancing-charges-hs252-self-assessment-helpsheet/hs252-capital-allowances-and-balancing-charges-2024


So as a minimum it eludes to offsetting 50% of cost and then pooling into special rate pool the following year. Still yet to get my head around this and AIA options.

Nomunnofun1

jamgar said:

Thanks for the replies, where I am a little confused is it would seem solar specifically falls under and is stated within the 50% special rate first year allowance

Reference:
https://www.gov.uk/government/publications/capital-allowances-and-balancing-charges-hs252-self-assessment-helpsheet/hs252-capital-allowances-and-balancing-charges-2024


So as a minimum it eludes to offsetting 50% of cost and then pooling into special rate pool the following year. Still yet to get my head around this and AIA options.

From your link:

Who can claim plant and machinery allowances

You can claim plant and machinery allowances if you have a business, and you buy assets for that business which you keep to use in that business. You can claim if you’re:

• self-employed
• a partnership
• a company or organisation that pays Corporation Tax
• a landlord — but not for residential properties that are not furnished holiday lets

If it is indeed a furnished holiday let and satisfies all the conditions for the let to be so treated you may be in luck!

Jeremy535897

Furnished holiday lettings (assuming yours meets the definition, and you must check that) are a special case, and solar panels qualify for relief under the FHL regime, but this comes to an end on 5 April 2025, so you will have to get on with it.
https://community.hmrc.gov.uk/customerforums/ifp/7e0a1120-7db8-ee11-a81c-6045bd0b2220
Once a holiday let is just like any other residential let, there are no capital allowances. If you go back to HS252, you will see this at the start:

Who can claim plant and machinery allowances

You can claim plant and machinery allowances if you have a business, and you buy assets for that business which you keep to use in that business. You can claim if you’re:

• self-employed
• a partnership
• a company or organisation that pays Corporation Tax
• a landlord — but not for residential properties that are not furnished holiday lets
• an employee who buys equipment that they need to do their job, because their employer doesn’t provide the item — not cars, vans, motorbikes or bicycles

The 50% rate is only for companies anyway.

jamgar

Jeremy535897 said:

Furnished holiday lettings (assuming yours meets the definition, and you must check that) are a special case, and solar panels qualify for relief under the FHL regime, but this comes to an end on 5 April 2025, so you will have to get on with it.
https://community.hmrc.gov.uk/customerforums/ifp/7e0a1120-7db8-ee11-a81c-6045bd0b2220
Once a holiday let is just like any other residential let, there are no capital allowances. If you go back to HS252, you will see this at the start:

Who can claim plant and machinery allowances

You can claim plant and machinery allowances if you have a business, and you buy assets for that business which you keep to use in that business. You can claim if you’re:

• self-employed
• a partnership
• a company or organisation that pays Corporation Tax
• a landlord — but not for residential properties that are not furnished holiday lets
• an employee who buys equipment that they need to do their job, because their employer doesn’t provide the item — not cars, vans, motorbikes or bicycles

The 50% rate is only for companies anyway.

Yes i meet the definition of a holiday let on all counts and am aiming to have them installed by February.

So...  that link is promising, if the 50% rate is only for companies does that suggest I can offset the full amount or is it a lower relief?

Thanks in advance, your comments are very much appreciated

Jeremy535897

First, have a look at https://www.gov.uk/government/publications/furnished-holiday-lettings-hs253-self-assessment-helpsheet/hs253-furnished-holiday-lettings-2024 to make absolutely sure. I assume the property is not in Wales.
You should use the 100% AIA, but don't claim if it would be wasting your personal allowance. If it would create a loss, consider what happens at 5 April 2025 (I have not studied the impact of the Budget and withdrawal of FHL status on losses or CAs carried forward, and it may vary if you have other let property).