The following ‘urban myths’ about renewable electricity generation and VAT were scotched recently at the latest Industrial and Power Association seminar hosted in association with Baker Tilly.
Discussing the potential pitfalls in VAT, tax and accounts when investing in power schemes, Jim Burberry, VAT Partner at Baker Tilly in Edinburgh, said:
Myth: Electricity generated from renewable sources by a Charity is a non-business/charitable activity
Fact: Electricity generated from renewable sources by a Charity is a business/Commercial activity
Myth: Electricity generated from renewable resources is subject to VAT at 5% when sold to the Grid
Fact: Electricity generated from renewable resources is subject to VAT at 20% when sold to the Grid
Myth: VAT compliance for renewable projects is the same for all investors
Fact: Tax/VAT compliance for renewable projects needs to be tailored and is specific to each investor.
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