Romford-based accountancy firm, Clemence Hoar Cummings, is calling on businesses to explore the tax and financial benefits of investing in environmental technologies this year.
With much of the world focused on the climate crisis and levels of pollution in habitats and oceans across the globe, Clemence Hoar Cummings says that tax systems are changing to encourage businesses to behave responsibly.
As part of this, the Government offers a number of tax reliefs to assist firms to invest in energy-saving equipment and green technologies, including Capital Allowances.
David Bransbury, A Director at Clemence Hoar Cummings, said: “Capital Allowances are a great way of reducing the amount of Corporation Tax that a company pays, while also investing in new plant and machinery for your business.
“There are currently more schemes than ever before available to companies, with generous allowances that help businesses to offset their investments against their profits, to reduce their Corporation Tax bill.
“Unfortunately, this level of generosity ends in March next year when the current Super-Deduction scheme closes, and the Annual Investment Allowances falls from £1 million per annum to just £200,000.”
David added that electric company cars were also growing in popularity and were one of the more common enquiries the firm had received in recent years.
“There are a number of financial incentives linked to electric cars from a lower company car tax rate to grants to support the costs of purchase and tax allowances to help cover the cost of charging point installations in workplaces,” said David.
“If you haven’t considered buying or leasing an electric company car before it is definitely worth considering now – not only to reduce your costs but also to demonstrate you are an environmentally responsible business.”
Earlier this year, the Government introduced a new Plastic Packaging Tax, which has seen a growing number of businesses face new charges for the plastic used to protect and transport goods, as well as importers who receive materials or products wrapped in plastic.
This is new measure is in addition to the Climate Change Levy and Emissions Trading Scheme that some businesses face, which effectively taxes businesses on the emissions they create.
David added: “These schemes particularly affect energy-intensive industries and those who pollute the most but looking further ahead it would not be surprising to see more taxes linked to the environmental credentials of businesses.
“That is why early investment in green technologies, using the existing reliefs and tax benefits that are currently offered makes sense.
“While businesses are facing a cost crisis at the moment, this may pale in comparison to the charges and price rises they may face in future if they don’t seek out efficiencies soon.”
To help businesses make sense of the current eco-tax measures and incentives, Clemence Hoar Cummings has produced a free guide that can be downloaded by clicking here.