Microgeneration Tax Exemption (increase to €400) on FIT earnings

ian123

Appears that the Government has upped the exemption limit from €200 to €400 starting from 1 Jan 2024

They also clarify that anything in excess of the limit must be declared and will be subject to income tax, USC and PRSI in the usual manner.

There is some text (3.1.1) concerning deductible expenses that exclude capital expenses, but do allow for incidental costs associated with the generation of the microgeneration of electricity profits - I might be completely wrong, but potentially this might include any servicing costs or panel cleaning to keep the system in good working order (and to adhere to terms of various panel guarantees/etc).

The document also makes it clear that the exemption is a applicable to every one named on the home electricity bill.

Interestingly there is a comment about the "extension of the scheme" until the end of 2025 - not sure what happens after that date...

07-01-44.pdf

https://www.revenue.ie/en/tax-professionals/tdm/income-tax-capital-gains-tax-corporation-tax/part-07/07-01-44.pdf

AntonP

Thank ian123, good to know.

All this tax thing is a bit of BS for individuals at home with small generators.

"Eleanor did not incur any incidental costs in generating this electricity".

Also, do they expect people to declare and pay 52% (fifty two percent) of whatever goes over 400€ a year in credits (minus "incidental costs")?

Well, what about including the cost of cleaning my panels on my own time? or what about the time invested in researching and setting up automations ? All that has a cost. Revenue should leave some things alone and not attempt to push people away of going solar and eco for a few coins. Disgusted.

SodiumCooled

Realistically how much are people exporting? Talking to suppliers you can expect significant credit going into the winter which (if true) would mean to me anyway a good few hundred euro. Are people really declaring over 200 already - I hadn't realised until now there was any tax implication I thought it was just written off against the bill as an in kind payment as such.

the_amazing_raisin

Where an individual is already required to file an income tax return, the exempt

profits do not need to be included on the return. However, where the calculated

annual profit is in excess of the exempt amount earned from micro-generated

electricity, that excess must be declared and will be subject to income tax, USC and

PRSI in the usual manner

At least they cleated that up, wasn't actually sure whether it needed to be declared

ColemanY2K

https://www.boards.ie/discussion/comment/121938279#Comment_121938279

I've already clocked up €73 since 1st February (7 or so weeks). Two of us on the bill so I fully expect to hit the €800 tax free threshold at some point in the autumn.

randombar

Stupid question maybe but is it €400 total export or is it €400 remaining after export - import?

graememk

https://www.boards.ie/discussion/comment/121939506#Comment_121939506

It's just on the total export/microgen income.

And its like all tax, it's what is above €400

lau1247

https://www.boards.ie/discussion/comment/121938976#Comment_121938976

Slap on another name on the bill and you're good to go, no?

ELM327

https://www.boards.ie/discussion/comment/121939506#Comment_121939506

Legally, it is 400 total export.

I am applying it as export-import for my own case. As it stands I don't generate more than 800 per year (I'm not on metered export) but once they change me to a smart meter I'm sure I'll be well over the threshold.

randombar

Ya I've generated €160 so far this year so I'll need to put a few names on it.

Re adding names, is it just adding them into the name field in Energia?

ColemanY2K

https://www.boards.ie/discussion/comment/121940253#Comment_121940253

in theory i could do that.

idc

https://www.boards.ie/discussion/comment/121940360#Comment_121940360

You need to ring energia to do it, (I still have to do that myself), the editable field on the website doesn't appear on your bills just the website!

k123456

Can I add a child name to my bill ,or adult only

ColemanY2K

https://www.boards.ie/discussion/comment/121940805#Comment_121940805

needs to be someone eligible to pay income tax.

SodiumCooled

Very interesting about the two names on the bill - I would almost certainly have just put the bill in my own name when the time comes (new build) but now I know to put in joint names. Thanks for the info on this all who mentioned it.

k123456

Lets imagine, we buy units from the grid, at 8c a unit for example

and then we export to the grid at 24

the net income is 24-8c = 16c , surely we can write off the cost to buy the units ?

antoinolachtnai

Sure but you won’t have the benefit of the microgen exemption for this income.

ELM327

https://www.boards.ie/discussion/comment/121941601#Comment_121941601

I'd be curious as to how the separate non microgen income would be demarcated on the bill.

k123456

Its quite possible, the cost involved to collect this tax , will be greater than the tax collected.

and while the tax is annoying, we in Ireland , have a generous FIT rate (for the moment)

idc

https://www.boards.ie/discussion/comment/121941137#Comment_121941137

I'm sure the taxman thought of that, it the same with people thinking you can claim the cost of your system as an expense and therefore not be liable for this tax. So likewise you paying 8c to then export at 24c doesn't matter. All that matters is you exported x units at 24c (how you paid for those or how you paid for the system to generate those is not applicable) it entirely taxed based on x * 24c and then and a tax credit of 400 (or 400 * number of income tax payers on bill) before you pay on the excess.

slave1

https://www.boards.ie/discussion/comment/121941083#Comment_121941083

There's no minimum age for Income Tax in Ireland so can be a one day old

slave1

https://www.boards.ie/discussion/comment/121941951#Comment_121941951

There's no cost, Ireland is a self declaration tax system so up to you to declare, I highly doubt they will chase on it, bigger fish to fry

the_amazing_raisin

https://www.boards.ie/discussion/comment/121942274#Comment_121942274

They seem to be trying to set it up so domestic microgeneration doesn't incur any tax, given they've raised the exemption

the_amazing_raisin

https://www.boards.ie/discussion/comment/121941129#Comment_121941129

As a general rule, try to put your partner's name on the bills as well so they always have a few proofs of address handy if needed

Also if they need to talk to one of the providers it's a lot easier if they're named on the account

SD_DRACULA

Damn, I need to chase up a few relatives and add them on the bill 😂

unkel

5 people on the bill here since day one I got a smart meter, so €2,000 FIT income exempted from income tax

Oh and wait, I just paid my daughters €2,000 to clean the panels on my shed. That is deductible now too?

SD_DRACULA

https://www.boards.ie/discussion/comment/121944775#Comment_121944775

You're a very generous dad 🤣

unkel

https://www.boards.ie/discussion/comment/121944942#Comment_121944942

They promised they would spend it on schoolbooks and college fees 😂

But seriously, this goes to show what a total nonsense this is. Some overpaid, overpensioned civil servants thought it was a great idea to dream this taxable status of micro gen up. Imagine the hours they wasted having meetings about this and doing up reports. It will never make any material tax money, just as @k123456 said

graememk

https://www.boards.ie/discussion/comment/121944961#Comment_121944961

Chasing pennies, can't make too much profit from selling to the grid.

And the ones that could be making a large "profit" are going to be businesses. And that's counted in the tax calculation for them either by having actual profit or less expenditure on electricity

k123456

https://www.boards.ie/discussion/comment/121944961#Comment_121944961

I'm guessing the overpaid, overpensioned civil servants , in question are trying to justify their existence

Separately , I called SSE about adding my child onto the bill, not possible to a child, even though a teenage child could conceivably want to pay bill in part, and is liable for tax.

However, they did mention, if you want to add an adult to the bill , you have to terminate your contract or contracts if you have dual fuel. They were not 100% sure , but reckon the termination fee might be waved , this could work to your advantage if you want to terminate current contract and move to a new contract with better rates (with SSE)

Asked where do I see , my a record of my FIT rebate from SSE , not possible to see on a regular basis, as the rebates are twice yearly, they explained , might be available on App EnergiHub

bullit_dodger

https://www.boards.ie/discussion/comment/121945001#Comment_121945001

I couldn't agree more. It seems a penny pinching exercise designed to work contradictory to the environmental initiatives. E.g. if I was going to go over €400/year and get taxed, I'd rather not fill my battery up every night and use the solar to fill it, rather than fill it at night rate and export.

I know that means I lose out, but then I don't get taxed.

At least have it at €1000 or something - not everyone lives with multiple people in the house.

unkel

https://www.boards.ie/discussion/comment/121945836#Comment_121945836

It's a self-assessed tax. I would send your utility provider an email, asking for them to include all named individuals in the email on the bill. Just keep that for your records

It might be worth people contacting your local TD to make a point of raising the threshold even more. They'll all begin hounding you for votes in the next 12 months so the timing may be good!

Lots of people may fall into this tax hole, and while the taxman has way bigger fish to fry, I wouldn't assume anything when it comes to Revenue.

Everyone should have at least two people on the bill anyway if possible. That gives €800 threshold which at 24c (Energia current fit) is 3.333 kWh exported ( €800 / 0.24c).

THE ALM

The €400 won't be long reached.

Bill for 24/01 - 28/03 on the Energia Smart EV rate with a 24c export rate.

473+ units for a credit of €113.71.

Considering this is not peak generation time you could easily double that in a billing cycle.

Waiting patiently to get name added to bill…

unkel

https://www.boards.ie/discussion/comment/121978509#Comment_121978509

It's on a tax year basis so I'd say as long as you have everyone on the bill by 31/12/2024, you should be good. In theory on a good day one could export 21 hours * 5.5kW * €0.25 = pushing €30 in just one day!!!

SD_DRACULA

https://www.boards.ie/discussion/comment/121979943#Comment_121979943

More actually, why would you limit to 5.5kw when NC6 allows up to 6.0?

unkel

https://www.boards.ie/discussion/comment/121980127#Comment_121980127

Yes good point. I have just set mine to 5.5kW to prevent going over the allowed limit. Maybe once I've found it is working as it should, I should change to 6kW. So then we are talking 6 * 21 * .25 = well over €30 per day

ian123

https://www.met.ie/climate/what-we-measure/sunshine I think your 21 hrs of solar generation is very optimistic- certainly at 6kw rate

GarlicBed

https://www.boards.ie/discussion/comment/121982573#Comment_121982573

No doubt he has some sort of "gotcha" planned about his 5c night rate .sad

SD_DRACULA

https://www.boards.ie/discussion/comment/121982573#Comment_121982573

Export doesn't need to come from the sun 😎

unkel

https://www.boards.ie/discussion/comment/121982573#Comment_121982573

Plenty of regulars in this forum are able to export 21 hours of 6kW on the best day of the year. You can do this entirely within the allowed limits for an NC6 form, with just a 6kW inverter. Fully legit. But you do need lots of PV and a big battery.

graememk

https://www.boards.ie/discussion/comment/121983674#Comment_121983674

And PV doesn't actually need to be AC connected, you can use charge controllers and just charge the battery directly, while the hybrid takes care of the grid, and staying within NC6 limits

unkel

https://www.boards.ie/discussion/comment/121983689#Comment_121983689

Exactly that. Was contemplating going that route myself. There are no regulations at all for DC systems (PV panels, batteries, solar charge controllers) unless connected to the grid

https://www.boards.ie/discussion/comment/121982655#Comment_121982655

Hardly a gotcha. You just dump whats left in the battery back to the grid before the cheap night rate starts again.

Nothing sad about that. As for your post...

unkel

Call my minus €2000 per year electric bill sad all you like 😁

😂😂

ColemanY2K

€108 FIT credit on February and March flogas bill. Our first since PV install at the end of January...could get used to this 😀

SharkMX

I wouldnt bother wasting money paying that tax. The amount of people I know who are getting away with huge amounts of unpaid tax, i dont think they will be coming after people for this.

Also i was paying tax at 13 years old working in my Uncles garage for the summer. So im pretty sure anyone is old enough to be a tax payer. And you dont have to officially have a name on a bill either. several people can be responsible for a bill even if its only got one name on it.

Just ignore the whole tax on FIT thing anyway and you'll be grand.

unkel

https://www.boards.ie/discussion/comment/122038859#Comment_122038859

Well done! Now, February and March were terrible for PV. April not looking so good either. But wait until you get the credits for May and June 😎

I'd say some of us might get a €400-500 credit for May alone…

slave1

https://www.boards.ie/discussion/comment/122038942#Comment_122038942

Ireland is a self assessment country so some of us have to self assess to be in good standing with Revenue e.g. accountants or Directors. There is no age of ascent for income tax in Ireland, a new born can go on the bill.

Speculation - Revenue will go off invoices so if names not on it they are well entitled to restrict, as I said, speculation

randombar

https://www.boards.ie/discussion/comment/121946052#Comment_121946052

just on this I emailed energia and they said I’d have to ring and put the people on the phone. Painful.