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The tax reliefs helping your business go green.

As ESG objectives become a significant priority for businesses of all sizes, many business owners are looking at adopting sustainable initiatives and practices.  

When you plan to adopt new operational practices or benefits, it’s important to consider how these fit with your existing financial strategies, as environmental schemes and technologies aren’t always designed to be cost-effective.  

However, your business may be entitled to claim tax reliefs when it invests in certain processes and initiatives. These are some of the most common for which SMEs are likely to be eligible.  

Taking voluntary action 

Climate change agreements (CCAs) are voluntary commitments between industrial operators and the Environment Agency, aimed at reducing energy usage and carbon emissions, setting specific targets for improvement. 

If you’re in a position to meet these targets, a CCA can be a significant cost-saver, since it will make your business eligible for a reduction on the Climate Change Levy (CCL), a tax on the energy used by a business for commercial purposes.  

The Government is particularly keen for high-energy sectors to adopt this measure.  

The Landfill Tax 

The Landfill Tax is levied against businesses that dispose of waste at landfill.  

If you avoid this through sustainable practices, you can reduce the amount of tax you need to pay on waste disposal.  

You may also qualify for tax credits if you redirect waste from landfills to recycle or reuse.  

Capitalising on sustainability 

Capital allowances themselves aren’t new, but you might not be aware that you can claim enhanced allowances for specific types of green equipment.  

The Enhanced Capital Allowance (ECA) scheme enables you to claim a 100 per cent first-year capital allowance on qualifying equipment, which includes: 

  • Electric and zero-emissions vehicles 
  • Electric vehicle charging stations 
  • Zero-emissions commercial vehicles 

This is in addition to the standard Annual Investment Allowance (AIA) – although both cannot be applied to the same expenditure.  

On your bike 

Does your team live locally?  

A cycle to work scheme could be a smart move for your business, providing a tax-free benefit that allows your employees to obtain bicycles and cycling equipment from you – cutting down on vehicle emissions and getting your staff moving! 

We can help you to identify the right sustainability initiatives for your business, supporting you with planning your cash flow around additional costs and applying for applicable tax reliefs.  

Contact our team today for further advice and support on adopting green technologies and working practices.   

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