We would not get close to that but I assume if we are exporting some of what we import, it would be possible to offset. No idea if and how you can amortise the equipment. 

And could the "business" be rotated between all adults in the house during the year, enabling all the allowances to be used? 

The relevant guidance in HMRC's tax manual is here:

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

I assume that most home owners will be exempt under the following exemption. I quote below in full. I am working on the assumption that as long as my generation does not exceed my consumption by more than 20%, I will qualify for the exemption. Otherwise the full amount of generation is taxable if, combined with other miscellaneous non-PAYE income, exceeds £1000 per year. Although HMRC potentially have access to the data from energy suppliers, I do not imagine they are going to be chasing homeowners for very small amounts of tax, especially where the guidance is extremely woolly (my emphasis): "This exemption is aimed at domestic microgeneration which is primarily intended to match the generator’s own home consumption needs. 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."

S782A Income Tax (Trading and Other Income) Act 2005

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:

1. the system is installed at or near domestic premises occupied by the individual, and
2. 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.

For the purpose of this exemption ‘domestic premises’ means premises used wholly or mainly as a separate private dwelling.

A ‘microgeneration system’ is defined in S263AZA of the Taxation of Chargeable Gains Act.

This exemption is aimed at domestic microgeneration which is primarily intended to match the generator’s own home consumption needs. 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.

No income tax will therefore arise on feed-in tariffs received by an individual from domestic microgeneration where the above conditions are met.

The exemption may apply where an individual installs a microgeneration system at a property which is not the individual’s main residence provided that the other domestic property is used by the individual, wholly or mainly, as a separate private dwelling and the other conditions are met.

Posted by: @papahuhu

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I recently heard that it is a requirement to declare annual PV revenue above £1K pa. It was news to me and haven’t been doing so, anyone know how it works in practice. 
For example I’m on a nett metering tarif, IOF, I build credit in summer and use a chunk of that to cover my winter loads. But I’m still left with more than £1k “gain”. 
For example it would seem reasonable to offset any installation costs in addition to energy import costs, anyone been brave enough to include it on their self assessment please? Thought it seemed too good to be true, teach me to be a greedy dog!

We are in the same boat - I expect that our export payments will exceed £1,000 on the IOF tariff, but I am confident we are covered by the S782A tax exemption, but am keeping detailed records regardless (our PVGIS generation prediction for installed solar is 112% of our last annual consumption figure at the time of install, so not intended to 'significantly exceed').

If for some reason the above exemption does not apply (or did not exist), it is not the "net gain" that is relevant - it is the total amount of payments for export that would be taxable, regardless of how much you've imported (which cannot be offset). For example, if you imported £1500 of electricity and received £1500 in export payments, you would pay tax on the £1500 of export payments received.

Tariffs such as IOF complicate matters as not all of your export payments arise from exporting solar microgeneration. Some arise from import and subsequent export from the grid. Presumably you would be required to keep detailed records to ensure you are paying the correct amount of tax.

However, as I said above, unless you have clearly installed an oversized microgeneration system capable of generating significantly more than you consume, the purpose of the exemption cited above appears to be to exempt normal home owners. If you have 50 solar panels on a ground mounted array and a 6kW wind turbine at the bottom of the garden, and you don't have a fleet of EVs, a heated outdoor swimming pool and sauna, then you may hear HMRC come knocking, at which point I guess the subject of amortisation becomes relevant.

@old_scientist @batpred

The other area where this becomes relevant is arbitrage (buying low and selling high).  This, at least as I read it, is NOT covered by the exemption referred to so counts towards your £1000 in TOTAL micro-business exemption (ie £1000 is the total exemption for all your micro businesses, eBay, ad hoc consultancy, paid wedding speeches etc.)

@James pa. I’d also read that energy suppliers were soon to start rejecting export arbitrage for battery only systems.
I have a MCS proforma heat pump quote for my install that provides a crazy high estimate for annual heating energy consumption of about 10 mWh. If they come after that I can try to use the defence that my PV was sized in anticipation of full house electrification. My base consumption is 3 mWh + theoretical 10mWh heating, my actual export isn’t 20% above that. It would seem unjust to penalise me if my actual heating demand is 50% less that predicted.

Posted by: @papahuhu

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@James pa. I’d also read that energy suppliers were soon to start rejecting export arbitrage for battery only systems.

I wouldnt be surprised. 

There is, in principle, a role for arbitrage to help balance grid load, but (at least based on what @transparent tells us) the way electricity is priced doesn't necessarily drive the right technical behaviours. 

I think it needs nodal pricing really to make it work but that was recently rejected by the Government.  Sadly this is understandable given the current climate, because it introduces the political hot potato of 'postcode lottery pricing' of which the 'ignore climate change and hope we get away with it, at least while we are alive' parties would make a field day.

Posted by: @jamespa

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I wouldnt be surprised. 

There is, in principle, a role for arbitrage to help balance grid load, but (at least based on what @transparent tells us) the way electricity is priced doesn't necessarily drive the right technical behaviours. 

From what I understood, these issues depend on the specific substation equipment. And the same argument applies to pv generation.

Could a concern to remove the use of Bess for local grid balancing create an incentive for domestic users to shift the import to other suppliers? 

The reality is that battery systems are a good idea whenever people are planning to install an ashp as it seems very obvious that, given the reluctance of our gov to tax gas (and the way in which it loaded extra costs on electricity), it becomes tricky to claim an ashp will cost less to run than a gas boiler. Removing any incentive to install them is a step against decarbonisation. 

@jamespa It is a bit silly and unfair as is. Octopus pays me more than they charge another customer without PV, so clearly not a sustainable model.
 But if they start taxing me I’ll be pushed into starting a bitcoin mine or herbal cigarette farm to self consume instead.

Posted by: @papahuhu

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But if they start taxing me I’ll be pushed into starting a bitcoin mine or herbal cigarette farm to self consume instead.

Well, adversity is the mother of all innovation 🤣 

Posted by: @batpred

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Posted by: @jamespa

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I wouldnt be surprised. 

There is, in principle, a role for arbitrage to help balance grid load, but (at least based on what @transparent tells us) the way electricity is priced doesn't necessarily drive the right technical behaviours. 

From what I understood, these issues depend on the specific substation equipment. And the same argument applies to pv generation.

Could a concern to remove the use of Bess for local grid balancing create an incentive for domestic users to shift the import to other suppliers? 

The reality is that battery systems are a good idea whenever people are planning to install an ashp as it seems very obvious that, given the reluctance of our gov to tax gas (and the way in which it loaded extra costs on electricity), it becomes tricky to claim an ashp will cost less to run than a gas boiler. Removing any incentive to install them is a step against decarbonisation. 

Agreed, and the current direction of travel appears to be to move some of the levies on electricity into general taxation, which whilst it will help reduce the direct cost of electricity does nothing to more heavily tax the dirty fuel that we want to discourage use of. I guess they cannot bear more pictures of pensioners huddled around candle in winter if they add more tax onto gas heating bills.

Getting back to the issue of taxing solar export income, I read many articles in the press leading up to the Jan 31st tax return deadline scaremongering that hundreds of thousands of solar households would have to do a self assessment tax return if they exceed the £1000 income from solar exports, and not one of those main stream press articles mentioned the tax exemption cited above that will apply to the vast majority of domestic solar installations in the UK which is not new legislation having existed since 2007/8.

Further, although energy suppliers can potentially share data with HMRC, they do not know your domestic consumption nor your solar generation figures - they only know your import and export figures neither of which are relevant to determining the exemption or calculation of any tax due. Given the intent to exempt the vast majority of domestic solar installs from income tax, I really do not see HMRC chasing the average homeowner for relatively small amounts of income tax that may be due. It was just an easy story for the press to write in the lead up to the tax deadline.

Regarding income from arbitrage, which presumably does not fall under the microgeneration exemption as you have not generated it, some back of the envelope maths shows that someone with 30kWh of battery storage who is able to cycle their battery once per day may export around 10,000kWh per year, and would need to achieve 10p per kWh arbitrage to generate an income of £1,000. I'm not aware of any tariffs that would facilitate that, although conceivably someone with a large battery system on Octopus Flux could get close if they were able to import and export fast enough during the respective 3 hour windows (minimum 10kW charge and discharge/export rate required).

Posted by: @old_scientist

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Regarding income from arbitrage, which presumably does not fall under the microgeneration exemption as you have not generated it, some back of the envelope maths shows that someone with 30kWh of battery storage who is able to cycle their battery once per day may export around 10,000kWh per year, and would need to achieve 10p per kWh arbitrage to generate an income of £1,000. I'm not aware of any tariffs that would facilitate that, although conceivably someone with a large battery system on Octopus Flux could get close if they were able to import and export fast enough during the respective 3 hour windows (minimum 10kW charge and discharge/export rate required).

I would have to check, as the inverter generates AC from DC..

With 30kWh, over 8kW export, optimisation of import and export and on currently available tariffs (assuming the current rates stay roughly the same around the year), it is certainly possible to exceed that yearly income.

But the ROI may be negative specially if 3k or so are expended on MCS related labour and paperwork!