Octopus Flux

[Krill]

Running through terms and conditions I found this:

4 Payment Method

4.1 Your monthly bill will show both the import consumption data under your Import Tariff and the export data under your Export Tariff.

4.2 You will pay the net difference if the cost of Energy you consume under your Import Tariff exceeds the payment that we owe you for the Energy you are exporting under your Export Tariff for the same period.

4.3 If the total payment due to you for the Energy you are exporting under your Export Tariff is greater than the cost of Energy you are consuming under your Import Tariff, this will show as credit on your online account.

4.4 Provided your meter readings are up to date, you can request a cash refund if your account goes into credit. This option will appear on your online account.

4.5 If you do not maintain your direct debit payment on your Import Tariff or do not pay your Import Tariff bill on time, in addition to the consequences outlined in our Import T&Cs (in “Non-Payment of Charges”), we may stop applying export credit under your Export Tariff to your account until all outstanding payments on your Import Tariff have been made.

4.5.1 We are not obligated to make Export Tariff payments to you:

(i) for any ‘Brown Export’ – i.e. exported electricity not generated by an eligible generation asset (including standby generators, batteries and technologies not supported by the Smart Export Guarantee; or

So brown leccie would still be paid for because they can't prove what generated it (and everything would be behind a MCS certified system even if one built a large self build battery and a second dc-dc solar pv array to top it up)

That tax liability is only realised once the money is drawn out of the account but as it is offset even against a gas bill it feels like this tariff had alot going for it: sell 1kwh during peak allows the purchase of over 3kwh of gas whenever you need it, Export in summer to cover winter costs, and with a large enough battery can cover arbitrage between cheap and peak slots without running into HMRC.

I'll probably move to it once it get a smart meter fitted.

[nowty]

That tax liability is only realised once the money is drawn out of the account but as it is offset even against a gas bill it feels like this tariff had alot going for it: sell 1kwh during peak allows the purchase of over 3kwh of gas whenever you need it, Export in summer to cover winter costs, and with a large enough battery can cover arbitrage between cheap and peak slots without running into HMRC.

As I have said many times, there is no tax liability on microgeneration if you stay within the 120% of normal use limit. If however you were over the limit and it became commercial rather than domestic, the tax liability would apply the moment the credit goes into your account irrespective of whether it was offset against any particular bill. You would be in a similar situation as the Ripple windfarm bill credits which are currently not covered by the microgeneration legislation exemption.

[Krill]

Nowty, I understand but I was not aware of how the export was paid for. Thank you for pointing it out.

The Ripple projects are not something which I am au fait with.

[nowty]

Nowty, I understand but I was not aware of how the export was paid for. Thank you for pointing it out.

The Ripple projects are not something which I am au fait with.

Ripple project 3 which is a solar farm is open for subscription soon, you might want to have a look as it might be of benefit. It does have some tax advantages as it allows you to use your interest allowance (which is in addition to your income tax allowance) if you have not used it all up.

https://rippleenergy.com/

We have the worlds longest thread on it, read the first couple of posts from the beginning of the thread if you want a flavour.

https://camelot-forum.co.uk/phpBB3/view ... 160#p30160

[John_S]

The whole tax situation is a mess especially regarding Ripple projects and very few people, including Ripple's finance director, understand it sufficiently to communicate it clearly to the projects members.

For micro generation, eg home solar PV, tax is relatively simple. FITs are tax free as long as you generation is not more than 120% of your usage. I assume that is gross usage, ie import plus own consumption of generation. For early PV adopters, it is quite possible that the FIT income is excess of both the gross and net usage cost. Unclear what happens when gross usage drops sufficiently to break the 120% limit eg because of energy saving measures, life style changes etc.

Ripple projects are different. First, the income, less the part being deemed return of capital, is taxed. For reasons that I do not understand, it is being taxed as interest rather than a trading profit or as a dividend. An interest rate linked to average windspeed sound ridiculous. Because of tax allowances, it may be taxed at a zero rate, provided it does not exceed that allowance. Probably means that every member will need to complete a self assessment return.

As I understand it, Ripple's 120% limit is there to comply with the Financial Conduct Authorities requirements for Co-ops. Co-ops are mutuals and the FCA wants to prevent anyone investing in them for an investment return instead of for the common good of members. No one knows what would happen if a different organisation ('Tipple') with no connection to Ripple set up a similar structure and we had an aggregate of over 120% in Ripple and Tipple.

It will be interesting to see what tax certificate/information Ripple provide us with after the end of the tax year.

[nowty]

I agree that Ripples ability to explain it is a mess but they cannot offer financial or tax advice, so their answers are always rather vague by design.

The reason why its taxed as interest is very simple and I am aghast that Ripple never point to the CoOp shares handbook, its because payments paid to individuals from a CoOp are classed as interest. End of, ok there is the capital repayment element to deduct.
https://www.uk.coop/resources/community ... income-tax

If your taxable income from it is within your allowance its unlikely you have to complete a self assessment return.

Online tool here to check if you need to complete a tax return.
https://www.gov.uk/check-if-you-need-tax-return

[Krill]

Nevermind.