Electricity FIT & Export Payments with Solar Panels

subjecttocontract

Are domestic electricity payments received from Octopus Energy for FIT & export taxable ?

onthemend

If you have solar panels or a wind turbine on your own home, the payments are generally exempt from Income tax, this applies to both the generation tariff and the export tariff.

I have also read, you must not intend to generate significantly more electricity than you consume at home. HMRC typically interprets 'significantly' as generating more than 20% above your own domestic needs.

If you meet the domestic criteria, you do not need to declare these payments on a self assessment tax return.

QrizB

Here is the official guidance:

https://www.gov.uk/hmrc-internal-manuals/business-income-manual/bim40510

And

https://www.gov.uk/hmrc-internal-manuals/business-income-manual/bim40520

For the generation tariff element, per -510:

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.

And the export tariff element, per -520:

With effect from tax year 2007-08 there is an exemption from Income Tax for an individual’s income from the sale of electricity generated by a microgeneration system where:

a) the system is installed at or near domestic premises occupied by the individual, and

b) the individual intends that the amount of electricity generated by the microgeneration system will not significantly exceed the amount of electricity consumed in those premises.

And

The term ‘significantly exceed’ in (b) above is not defined in Section 782A and should be considered by reference to the particular circumstances. However, in general, a householder who does not intend to generate an amount of electricity more than 20% in excess of their own domestic needs is unlikely to be regarded as intending to significantly exceed the amount of electricity consumed in their own premises.

So provided you're not generating more than 20% more electricity than you use, you should be ok.

Tiberius2nd

https://forums.moneysavingexpert.com/discussion/comment/81972443#Comment_81972443

What period does the 20% rule refer to? Are we talking over a whole year? This would make obviously sense, but the wording is a bit ambiguous.