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Where Taxpayers and Advisers Meet

Battery Storage & Resale of Electric - Tax Implications

Landlord-Man
Posts:2
Joined:Thu Mar 17, 2022 12:41 pm
Battery Storage & Resale of Electric - Tax Implications

Postby Landlord-Man » Thu Mar 17, 2022 12:55 pm

I have been given the all clear from Ofgem that the following is acceptable - but need to know the tax implications please.................

I plan to invest £20,000 to purchase a Battery Storage System for my 4 x studio Furnished Holiday Lets (all electric)

The batteries will be charged by a combination of Solar and cheap Night Tariff grid electric - at a cost of under 7.5p kWh (cost of power not infrastructure).

My guests have coin meters and pay for electric via those. Ofgem have confirmed I can charge what I like for this electric as it is from Battery storage.

So, I plan to charge my guests a few pence below the market rate (perhaps 28p kWh) so they do save a little ££

In a typical year, they will pay (example) £1,200 for electric that cost me £400 to generate, making a "profit" of £800 per year, per flat = £3,200 overall.

For my existing accounts I report the cost of electric from supplier and what guests have paid me and at present they are more or less identical.

But, if I go down the battery storage route, it will show that I am making £3,200 "profit" when I'm not once the battery set-up is taken into account.

So, as the batteries etc have a 10 year warranty, am I permitted to account for £2,000 per year as a "cost" of supply, reducing my yearly profit down to £1,200 ?

Obviously, if the set-up lasts beyond 10 years, my taxable profit will go back up.

Hope that makes sense??

And finally, if I decided (or needed) to go from FHL to standard AST Letting, would any answers to the above change?

THANK YOU

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