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Environmental Matters
Key advice:
1. Enhanced Capital Allowances
The Enhanced Capital Allowance (ECA) scheme provides up-front tax relief for any business paying corporation tax or income tax, that invest in the installation and purchase of energy saving and water saving equipment. ECA permits businesses to deduct 100% of capital expenditure against taxable profits in the first year, which assists cash flow and shortens the payback period on the investment. To claim this tax break, it must be submitted in the following years Tax Return by your accountant with proof the expenditure was on plant meeting high energy or water efficiency standards (see below).
For more details see www.eca.gov.uk
For enquires about the tax system and claiming ECA www.hmrc.gov.uk
2. Energy Technology List and Water Technology List
Items listed on the Energy Technology List are energy efficient products which, if installed, may result in significant long-term energy savings and financial benefits. Likewise, items listed on the Water Technology List are products with water saving characteristics aimed to reduce the cost of water bills. Items appearing on either of these lists are generally eligible for ECA.
For more information and details both lists see www.eca.gov.uk
3. ECA on cars with low CO2 emissions
Enhanced Capital Allowances are available for capital spending on new cars with carbon dioxide emissions of not more than 120gm per kilometre driven for use in their business. The Inland Revenue has published guidance on these allowances which is available at www.hmrc.gov.uk/capital_allowances/cars.htm
4. Green Travel Plan – tax breaks on bikes
The Government’s Green Travel Plan allows you to get a bike and associated accessories, through your employer, exempt of Income Tax, National Insurance and VAT. You pay the money back by a small salary sacrifice each month - with no taxes on the payment.
You’re actually leasing the bike from your employer, but it becomes yours at the end of the lease. Normally you then pay a small final fee to own the bike outright. We can provide examples of how this scheme works and could administer the scheme for you through our payroll services.
5. Climate change levy on energy bills (CCL)
The levy applies to electricity, gas and coal supplies (including LPG) used by businesses, agriculture and the public sector. Up to 80% discount on the CCL applies to energy-intensive sectors. To access the 80% discount a business must be in one of the sectors that have negotiated an agreement with DEFRA and go through an enrolment that commits the business to meet certain energy efficiency improvements over a series of years. If a business over-achieves against its targets, it may have the option of selling its over performance, which is measured in Carbon Dioxide savings, to other businesses that have not met their targets.
Legislation advice
Environmental legislation is a fast-moving sector, and keeping on top of current and forthcoming legislation is important to all businesses, and unfortunately ignorance of legislation cannot be used as an excuse in court or with customers
The NetRegs website is free to use and is regularly updated. Its aim is to help small and medium-sized enterprises (SMEs) in the UK to understand the complex environmental regulations that can affect them. The site provides guidance on how to comply with environmental law as well as advice on good environmental practice.
You can view all the information online at www.netregs.gov.uk
Grants & Loans:
Please contact us for further details on the followings schemes.
Low carbon building programme (LCBP)
Renewable Energy for Devon (RE4D) – Devon only
Leader Plus – Business Support and Development Grant Scheme
Carbon Trust interest free loans
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