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A client is generating electricity at his residential property and receives up to £6,000 per quarter as a feed-in tariff. There is no income tax liability if the sale of electricity does not significantly exceed use, but VAT treatment depends on whether the payment is a generation tariff or an export tariff
We have a client who started generating electricity at his property several years ago but I am still unsure of the tax treatment. The client was under the impression from the promoters that the income generated from feed-in tariffs was tax free but I should be grateful if readers can confirm this.
Am I right in thinking that residential generators are not taxable but commercial generators are? If that is the case where is the dividing line drawn?
What now concerns me is the VAT treatment. Typing “VAT” into any of the feed-in tariff websites produces no results and there is little in the way of documentation accompanying the quarterly payment of up to £6 000 that the client has received in the most recent quarters.
Can readers advise on the VAT status? For example if the client is VAT registered should this income...
