More than fifty-four thousand households with solar panels are being warned they could face an automatic £100 fine from HM Revenue and Customs (HMRC) if they miss the imminent self-assessment tax return deadline.
The Tax Trap for Solar Earnings
The warning comes as a record number of UK homes are now generating income by selling surplus solar energy back to the national grid. Around 1.6 million households own solar panels, with many earning over £300 per year through government-backed schemes like the Smart Export Guarantee (SEG).
However, this extra income, when combined with money from other side hustles, can push homeowners over a crucial tax threshold. George Penny from The Solar Co highlights that the £1,000 tax-free trading allowance is easily exceeded, creating a legal obligation to declare the income to HMRC.
Thousands at Risk of Missing the Deadline
Industry analysis suggests that an estimated 605,966 solar panel owners are likely required to submit an online Self Assessment return for the 2024/25 tax year. The deadline for this is 31 January 2026.
Based on HMRC's own figures showing that around 9% of taxpayers miss the deadline each year, more than 54,500 solar households could be hit with an immediate £100 penalty for late filing. This fine alone would wipe out roughly a third of the average annual earnings from SEG payments.
Urgent Steps to Avoid Penalties
George Penny urged homeowners to act quickly: “Ahead of the deadline, it’s vital that solar panel owners check exactly how much they’ve earned, including SEG payments.”
He advised residents to review their latest energy supplier statements, which detail export earnings. If total income from SEG and any other side hustles exceeded £1,000 between April 2024 and April 2025, it must be declared to HMRC. Failure to do so can result in the automatic fine and potential further charges.
With the final deadline fast approaching, the message for the UK's growing number of solar-powered homes is clear: assess your income now or face a costly financial penalty.
