Solar panels for self-employed

Are solar panels a 'plant and machinery'?

If you’re looking into solar panels for your business, then you’re probably already aware that solar panels class as ‘plant and machinery’ that your business can claim capital allowances on. This saves you money on the cost of the installation thanks to the tax relief that capital allowances afford your business.

Are solar panels a special rate expenditure?

With effect from 1 April 2012 for corporation tax and 6 April 2012 for income tax, all capital expenditure on the provision of solar panels is specifically designated as special rate. The reason for designating solar panel expenditure as special rate expenditure was to ensure clarity of treatment.

Are solar panels a tax break?

As a business who is investing in solar panels, you’re entitled to a capital allowance that provides you with a tax break. This is to encourage more businesses to switch to renewable, green energy to help the UK government move towards their target of Net Zero by 2050.

What are the benefits of self-consumption of solar energy?

As well as the economic benefits, self-consumption of solar energy also has ecological advantages. By using a renewable energy source like the sun, you reduce your carbon footprint and help combat climate change.

Do solar panels produce a lot of electricity?

Residential customers equipped with solar panels without a storage solution produce 30% of their electricity needs on average*. Beyond that, they rely on the traditional electricity grid. Because solar production varies throughout the day and the seasons, it does not cover the consumption needs of a site at all times.

Do you qualify for a capital allowance for solar panels?

So long as you bought the solar panel installation new, specifically to be used at your business, and the total cost is below £1 million, then it ought to qualify for a capital allowance under the AIA. You’ll be able to deduct the full cost of the solar panel installation from your profits.