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VAT on home storage batteries is zero?

 
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 littlefinger
(@littlefinger)
New Member Member
Joined: 2 years ago
Posts: 4
Topic starter 18/10/2024 7:41 am   [#1777]

I was excited when I read the about 0% vat on battery storage installation.

When I got a quote recently from one installer, I felt I'm the wrong person to be excited.

The 0% VAT rate applies to the installation of home battery storage systems when provided by a VAT-registered installer.
This means that if you purchase and have the battery installed by a registered installer, you benefit from the 0% VAT rate on both the supply and installation.
However, if you buy the battery separately and then hire someone to install it, the 0% VAT rate only applies to the installation service.

Also found from https://community.hmrc.gov.uk/customerforums/vat/608cc770-7d49-ee11-a81c-002248c67450

The zero rating applies only to the supply AND installation of energy saving materials such as PV/batteries. The contractor will buy materials from wholesaler, those materials will be plus 20% VAT as it's just materials. The contractor then installs those materials to your property - the act of installing those materials should see the whole supply (materials + labour) being zero rated. the contractor can reclaim the VAT they incur when they buy the materials. If your quote is including VAT at 20% then you should challenge the contractor and ask why they have not zero rated their quote. Note, the install of PV/batteries is zero rated, not "exempt", in your post you refer to VAT exempt status, there is no exemption from VAT, VAT is charged but at 0% so when speaking with contractor use the correct language so that there is no ambiguity with them. If you buy materials yourself from a wholesaler, they will be plus 20% VAT.

So it means if I try to install home battery system bia DIY or asking some contractor to do it will add VAT?

 

Also I would like to share a response I got from a installer, the cost for installation I think around 2k from my calculations!

Regarding the VAT on home storage batteries, you’re right—VAT was removed for homeowners on these purchases. However, when we purchase the materials as a company, we still need to pay VAT, which is reflected in the overall cost of the project.

To clarify, the quote I’ve provided includes everything necessary for the installation:

  • All materials required for the system
  • Delivery of those materials
  • Labour for the installation
  • 5 years of workmanship insurance
  • MCS certification for the installation, which ensures that you’ll meet industry standards for safety and quality.

So, I’m wondering if the installer is being disingenuous?

Cheers



   
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 IanMK13
(@ianmk13)
Reputable Member Member
Joined: 3 years ago
Posts: 195
18/10/2024 12:50 pm  

I think you know the answer 😉 

I also found that my itemised quotations generally quoted around the VAT inclusive prices when, not only can they reclaim the VAT, they will most likely receive trade discounts, too.  At the end of the day, though, it's the bottom line that counts, so get multiple quotes.  If you use a small business (e.g. a sole trader with, perhaps, an assistant and supported by 'subbies' as required on the day), remember all the time they have to spend on admin of various types.  It's not like a 9-5 job and they often have difficulty finding family time.  It can be particularly stressful for these small guys.



   
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 littlefinger
(@littlefinger)
New Member Member
Joined: 2 years ago
Posts: 4
Topic starter 18/10/2024 1:12 pm  

@ianmk13  tq.

Yes I understand, so from my point of view what is reasonable.

I asked quote for this https://www.bimblesolar.com/Sunsynk-LifeLynk-XL which is £1,978.80 (including VAT)

I was quoted 4450, as someone with much knowledge I wan to know how reasonable is this?

May be the system I have think of should be big to absorb fixed costs etc

 



   
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Majordennisbloodnok
 Majordennisbloodnok
(@majordennisbloodnok)
Famed Member Moderator
Joined: 5 years ago
Posts: 1993
18/10/2024 1:13 pm  

Agree with @ianmk13. You're looking for a good job at a fair price.

That said, if the installer is trying to charge VAT and then claim the VAT back, that will tell you something about them, but not how good a job they do. My personal feeling is that if they need to quote a higher ex-VAT price and do things by the book then so be it, whereas doing it any other way smacks of dishonesty that would get me wondering in what other ways I have to worry about their reliability.


105 m2 bungalow in South East England
Mitsubishi Ecodan 8.5 kW air source heat pump
18 x 360W solar panels
1 x 6 kW GroWatt battery and SPH5000 inverter
1 x Myenergi Zappi
1 x VW ID3
Raised beds for home-grown veg and chickens for eggs

"Semper in excretia; sumus solum profundum variat"


   
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