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Increase In VAT On Solar Panels May Not Proceed

It had been intended that VAT would go up on solar panels from the 1st August 2016 from 5% to 20% but it would appear that this may not be going to happen. This is because, apparently, Labour, a number of other opposition parties and even some conservative members of parliament had opposed this VAT increase in the recent Finance Bill and were proposing an amendment to the bill that is not going to be opposed by the Government.

The proposed VAT increase on solar panels from 5% to 20% on the 1st August 2016 may not now happen.

It is no secret that the solar panel industry has been struggling in recent months with fewer installations and, if the proposed VAT increase were to go ahead, it could have serious implications for the industry. For instance, it could see consumers having to pay around an extra £900 on a solar panel installation that was costing say £6,000 plus VAT. Such an increase could end up putting off quite a lot of people from having solar panels installed on their rooftops. If this were to happen it could make it harder for the UK to meet its renewable energy and carbon emission targets by 2020 and this would be such a shame.

It could also result in companies involved in the solar panel industry having to make some of their workforce redundant that is something that has been happening in recent months. This would not be good news for the solar photovoltaic panel sector nor for the country as an increase in unemployment is unwelcome for a number of reasons.

We will continue to monitor the situation and will keep our readers that have an interest in the solar panel industry informed as and when there are any further developments in this respect. Many people and companies will be hoping that VAT is not increased on solar panel installations as had originally been intended.

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