20% VAT surprise scrapped for battery retrofit

[nowty]

Almost certainly wont be for DIY systems but makes a welcome change if your having a new system installed by an installer without solar panels.

https://www.current-news.co.uk/20-vat-s ... r-storage/

From the Spring Statement in 2022, energy saving domestic equipment such as heat pumps and roof-mounted solar have been exempt from the VAT. BESS too were exempt, but only when installed alongside other energy-saving materials such as solar.

But yesterday (11 December) the government announced that retrofitted BESS will now also be exempt from the tax.

Members of the energy industry, including the Association for Renewable Energy & Clean Technology (REA) and Solar Energy UK have been campaigning for retrofitted BESS to also be included in the VAT exemption, something which was not mentioned in the initial Battery Strategy published on 26 November of the preceding Autumn Statement.

However, following a consultation on the expansion of the VAT relief on energy-saving materials – also announced in the 2022 Spring Statement – the government revealed:

“The government agrees with respondents, though, that this technology meets all of the stated objectives for this VAT relief in its own right, and will therefore bring electrical battery storage within the scope of the relief. This means that the technology will now also qualify for VAT relief when either retrofitted to a qualifying energy-saving materials, or installed as a standalone technology connected to the grid.”

[Countrypaul]

https://www.gov.uk/government/consultat ... -responses

[Mart]

Party time next Feb then.

[AE-NMidlands]

The UK government has exempted retrofitted battery energy storage systems (BESS) from its 20% VAT, from 1 February 2023.

in the first linked article sounds as though retrospective claims could be made. If so that's good for some people, as the normal competition will have kept prices down (and you'll get the VAT back) whereas now the suppliers will be just making a token reduction and keeping the rest...

[openspaceman]

Presumably it will have to be fitted by a VAT registered electrician so they can claim the 20% back rather than the battery being zero rated.

[nowty]

Presumably it will have to be fitted by a VAT registered electrician so they can claim the 20% back rather than the battery being zero rated.

Yes, I'm afraid, supplied and fitted.

[Mart]

The UK government has exempted retrofitted battery energy storage systems (BESS) from its 20% VAT, from 1 February 2023.

in the first linked article sounds as though retrospective claims could be made. If so that's good for some people, as the normal competition will have kept prices down (and you'll get the VAT back) whereas now the suppliers will be just making a token reduction and keeping the rest...

I'd assumed it was a typo, as the Gov paper refers to Feb 2024.

[nowty]

The UK government has exempted retrofitted battery energy storage systems (BESS) from its 20% VAT, from 1 February 2023.

in the first linked article sounds as though retrospective claims could be made. If so that's good for some people, as the normal competition will have kept prices down (and you'll get the VAT back) whereas now the suppliers will be just making a token reduction and keeping the rest...

I'd assumed it was a typo, as the Gov paper refers to Feb 2024.

The article was correct, you have to read it carefully as it talked about the previous rules made in 2022 coming into force Feb 2023 and the outcome of the consultation (a couple of days ago) to add in battery retrofit but I believe that will come in Feb 2024.

So no retrospective refunds.

EDIT - Ignore me, I speed read too fast, it is a typo.
But yes it comes into effect Feb 24 so still no retrospective refunds.