Sainsbury’s and IKEA among big firms calling on government to stop solar tax hike

Sainsbury's and IKEA among big firms calling on government to stop solar tax hike

Sainsbury’s and IKEA are among some of the big brands urging Chancellor Philip Hammond to stop the proposed rise in business rates for solar panels.

The two companies have joined the Solar Trade Association (STA) and more than 160 organisations including, schools, public institutions and energy suppliers, which are calling on the government to drop the solar tax hike.

Some of the organisations are the Federation of Small Businesses, Energy UK, the Renewable Energy Association and Good Energy.

Former Chancellor George Osborne proposed to increase the standard VAT for solar panels from 5% to 20%.

According to the STA, the “rateable value” will go up from a flat £8/kW to between £48/kW and £66/kW.

That means a business with a 100kW system will see their annual bill go up from around £400 to more than £2,730 per year, it adds.

In a letter sent to Mr Hammond, they pointed out the tax rise is most likely to hit smaller companies – which are less likely to have set up different ownership schemes for their panels – as well as public sector organisations such as state schools and hospitals.

It added: “It is disappointing that over the past year major policy changes have led to rooftop solar deployment falling by over 80% in the UK. Instead of stabilising the industry, it has been further jeopardised by surprise business rate rises for organisations that own and supply themselves with solar power.

“Businesses, schools and others with solar face a sharp six to eight fold tax hike from next April. If this proceeds it will also restrict future investment in solar rooftops all over the UK and put the British solar industry at a disadvantage, both at home and internationally.”