There are many ways that UK businesses can start to make changes in order to go green. And there’s no doubt that the government will offer the incentives and opportunities to support this.
With tax relief schemes and various financial incentives, the government is pushing UK businesses to make small changes and switches in the everyday running of their businesses in order to support the government’s goals of achieving net zero emissions nationwide. From government cash grants,
Avoiding green taxes
Green taxes are put in place by the government as a way to encourage businesses to reduce their carbon emissions, waste and pollution. Businesses that are guilty of emitting larger amounts of pollution and have high carbon emissions will incur green taxes. This additional financial cost is certainly something that all businesses will want to avoid and is an obvious reason to re-think current operations in order to cut down on things like fuel consumption and look for greener alternatives.
Climate Change Levy (CCL)
The CCL refers to a tax that is added to the energy charge of businesses. This was introduced by the UK government as a means to encourage UK businesses to switch to renewable and green energy sources. With the overall aim of reducing emissions.
If a business is emitting less carbon emissions, they will pay less in CCL charges. How much Climate Change Levy your business pays will be noted on your business’ energy bill.
If you wish to pay a reduced rate of CCL you must join the Climate Change Agreement with the Environmental Agency, however by doing so you are agreeing to improve your business’ energy efficiency and measure and report on this over time. Not all businesses will be eligible for the CCA, so you must check this with the government and Environmental Agency.
Tax incentives
Meanwhile, green incentives, particularly tax incentives, are offered by the government to businesses taking an active role on the road to net zero emissions. Working to adopt change and make investments that will mitigate the impact their business has on the natural environment. While for large companies this may be a huge investment into green projects, for small businesses and microbusinesses these can be little areas of change that will make a big difference in the long term. A hopeful statistic is that, according to PwC, 60% of CEOs believe that environmental, social and governance (ESG) issues will be a long-term investment priority over the next three years.
Incentives include capital allowance on energy efficient items. This may be zero-carbon technology to use within your company. You can claim capital allowances via the government for the following qualifying equipment:
- Electric and zero emissions cars
- Plant and machinery for gas refuelling stations, for example storage tanks, pumps
- Gas, biogas and hydrogen refuelling equipment
- Zero-emission goods vehicles
- Equipment for electric vehicle charging points
- Plant and machinery for use in a freeport tax site, if you’re a company
More information about how to apply for capital gains allowance and how make a tax return can be found at GOV.UK
Cash grants and financial support is being offered by the government, but schemes are regularly opening and closing for applications. It is important to pay close attention to what new funding is available for businesses, particularly your industry, and apply before applications close.