Becoming a business that prioritises green incentives has become more important than ever to both the consumer and employees but way beyond the ethical and societal benefits it might have for others, it can actually be a great financial decision that you might not already be familiar with.
Where businesses becoming more sustainable was once seen as a really expensive change, they have been shown some great reliefs and incentives where it might not even be something to negotiate anymore. While it’s important to note that recent generations such as Gen Z and X are more likely to choose a sustainable company over its non-sustainable competitors, there is always that edge it gives you, but yet again, it’s hard to assess how great of a financial impact that has and isn’t enough for some businesses to turn a green leaf.
This article explores the tax reliefs and schemes available to UK businesses that adopt eco-friendly practices, all in the hopes others will decide to do the same thing.
Understanding the Green Business Landscape
As we are all well aware, striving for a more sustainable world has been the aim for many and for a very long time, so it goes beyond the word ‘trend’ and is more of a necessity and strategy move in the world of business. Adopting green initiatives into your current business model can essentially reduce your carbon footprint, operational costs, enhance your brand reputation, make a change in publication and attract new customers who share the same morals and values.
All of these, while they may take some work in the beginning, can have more term pay, especially with new rules and regulations coming in place that may force businesses to change. You are better off doing it out of the ‘kindness’ of your own heart and reaping the benefits listed above.
The UK government have decided to give businesses that extra push to make the necessary changes through various tax reliefs and schemes.
Who Can Go Green?
So you might be wondering which businesses have the means to go green or what ‘go green’ means. Going green means that you are switching out ways of using bad energy that contribute to carbon footprints and so forth, but it could also be through logistics, product development, or working from home. There are so many little things that we do, especially in the world of business, that can be adjusted to contribute to a more sustainable way of living. So this would be more than applicable to restaurants, retail stores, tech companies and even facilities management companies in Yorkshire.
Tax Relief for Green Businesses
Annual Investment Allowance (AIA)
This allows businesses to claim 100% tax relief on any manufacturing plant and machinery equipment (these guidelines will be set by the government). Automatic tax relief on products that are specific for energy savings. If you are confused about which products you are entitled to, gather some tax relief by enquiring with a professional.
As these modern technologies and products can be more expensive than those that are bad for the environment, the government can give you some sort of mandatory discount on them, making them more accessible to those who are buying them.
Capital Allowances
Certain green investments, such as low-emission vehicles and energy-saving equipment, may qualify for capital allowances. This is essentially another form of tax relief.
Research and Development Tax Credits
If your business conducts environmental research and development projects all for the benefit of a community or the whole of the UK, you may be eligible to claim some forms of tax relief to allow the process to continue but to give back to those companies that are providing a useful service in this climate.
Government Schemes and Support
Green Business Fund
This fund essentially offers grants and loans to support businesses that are making or energising sustainable processes. It can be a very expensive process for businesses to switch up so support is needed for change to happen.
Energy Technology List
This support provides tax relief for businesses that are taking their own money and investing it in energy-saving technologies. This could be just general investments in other companies or specific projects.
Feed-in Tariffs
Feed in tariffs used to provide support, but they are no longer useful for those who were involved with installations.
Final Thoughts
Enhancing sustainability doesn’t have to come at the expense of your business and when it comes to support and reliefs that you can get it’s best advice that you take them while you can. Do you research into the specifics as every business is different and you might get surprised on which things you are entitled with some relief.
