VAT rate to increase for solar panels, wind turbines and water turbines

HMRC has announced plans to increase the VAT rate on the installation of solar panels in residential accommodation to 20% with effect from 1 October 2019. This follows long standing infraction proceedings against the UK by the European courts who found that the UK had taken too wide an interpretation of the reliefs available for qualifying energy saving materials (ESMs). Whilst the UK tried to argue their case, the European courts agreed that the UK legislation was not fully compliant with EU law.