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bigduckontax
bigduckontax, Accountant
Category: Tax
Satisfied Customers: 6630
Experience:  FCCA FCMA CGMA ACIS
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Assistant: How can I help? My question is about vat. I’d

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Hi there.
Assistant: Hi. How can I help?
Customer: My question is about vat. I’d like to install solar panels myself on my house. As an individual I can only but the solar panels at 20% vat. However I’m also the director of a vat registered limited company. As the installation of solar panels are subject to a reduced vat of 5% id like to buy and install them through the business. It would hopefully work as follows. The business buys the panels at 20% vat and then makes a ‘self supply’ for their installation to me as an individual at 5% vat and I pay the business the relevant invoice at 5% vat. The business then reclaims the remaking 15% vat on its tax return. Is this a legitimate self supply of materials and services. Everything I read on HMRC website seems to suggest it should be. Thanks.
Assistant: Which tax year are you filing for?
Customer: 2019/2020
Assistant: Anything else you want the Accountant to know before I connect you?
Customer: Would there be any benefit in kind payable? Thabkd

Hello, I am one of the experts on Just Answer and pleased to be able to help you with your question.

I concur with your opinion, reclaim the VAT.

Customer: replied 9 days ago.
Thanks. I’m just having trouble persuading our business accounts that this is legitimate. This was their response In respect of solar panels and your query regarding VAT, we would not suggest putting the cost of solar panels through the company if they are going to be attached to your personal property. Whilst the process you suggest below is possible, as you would see a direct benefit from this personally through the lower cost there is potentially a benefit in kind issue. In addition, there is a risk that in the event of a VAT, PAYE or corporation tax inspection, it could be picked up and HMRC could view it as a contrived scheme.

That does not surprise me in the slightest. However, I am of the opinion that the exercise is worth the gamble providing funds are retained in liquid form in the event of a dis-allowance by HMRC.

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Thank you for your support.