Domestic reverse charge ― trading in renewable energy certificates

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Value Added Tax

Guidance

This guidance note provides an overview of the scope of the domestic reverse charge applied in respect of trading in renewable energy certificates. This note should be read in conjunction with the Domestic reverse charge ― overview and Domestic reverse charge ― accounting requirements guidance notes.

Background

The reverse charge mechanism for businesses trading in renewable energy certificates was introduced with effect from 14 June 2019 and applies to the buying and selling of renewable energy certificates in the UK from that date.

What are renewable energy certificates?

These are certificates that are issued to electricity and gas generators when they produce renewable energy. These certificates can be traded as a commodity which creates an opportunity for fraud to occur. These certificates are commonly called Guarantees of Origin (GoOs) and can also be called (this list is not exhaustive):

•
Renewable Energy Certificates (RECs)
•
Renewable Obligation Certificates (ROCs)
•
Renewable Energy Guarantee of Origin (REGO)
•
International Renewable Energy Certificates (I-RECs)
•
Renewable Gas Guarantees of Origin (RGGOs)

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