Saffery Champness says proposed changes to Domestic RHI welcome but tax treatment of schemes is still unclear
The Department of Energy and Climate Change (DECC) has announced a number of amendments to the Domestic RHI Scheme that, subject to Parliamentary approval, will come into force in Spring 2015.
One important change is clarification that a property made up of multiple buildings can be eligible for the domestic RHI scheme - even if some of the buildings are used for commercial purposes - as long as there is a dwelling being heated. Examples given include a dwelling plus garage or outbuilding, or a dwelling plus a commercially used building such as an office annex or stables.
This opens up the opportunity for schemes that previously didn’t qualify for the domestic RHI to consider this as a source of funding. It also means that in some circumstances there will be a choice as to whether to apply for Domestic or Non-Domestic RHI tariffs. The choice as to which scheme will be most suitable and beneficial will in many cases need detailed analysis. There are however still other aspects of the scheme that require further clarification.
Shirley Mathieson, Head of Renewables at UK top 20 Chartered Accountant Saffery Champness, says:
"There is still a lack of clarity as to the tax treatment of income received under the Domestic RHI scheme and, although we welcome the increased choice and flexibility that this particular announcement brings, it will also muddy the waters further as to the tax treatment. It will be important to look at each scheme on a case by case basis to determine which will be the most appropriate tariff to apply for, but the lack of transparency over the tax treatment in certain cases could make this analysis extremely difficult."