Going green could be as beneficial to your bottom line as it is for the planet07/04/2021
Businesses have been provided with numerous incentives to cut their carbon footprints down to size over the last two decades. In 2020, this list of “green capital allowances” has been shortened significantly, but there are still a number you can make use of if you want to benefit from reducing the environmental impact of your business. Here’s what you need to know:
From April 2021, 100% first-year Enhanced Capital Allowances (ECAs) are still available on a number of business purchases: new and unused zero-emission cars and goods vehicles, new electric vehicle charging points (until 31 March 2023) and gas refuelling stations that dispense natural gas, biogas, or hydrogen fuel (until 31 March 2025).
“Zero-emission” means just that: vehicles that produce 0 g/km of CO2. This is important to note, because ECAs used to apply to low-emission vehicles (50 g/km of CO2). Under the new guidelines, there are still a number of vehicles which qualify (electric and otherwise) but you’ll have to do your homework.
For the purposes of this discussion, the term “unused” also has a clear (and rather generous) definition. A vehicle can have been driven a limited number of miles for testing, delivery, and demonstration. It just can’t be previously owned.
In addition to the ECAs above, there are other ways your business can gain relief for going green. One often overlooked example is adding thermal insulation to existing buildings, which is eligible for Annual Investment Allowance (AIA). As a result, such upgrades can provide 100% relief in year one. Land remediation relief is another example that businesses willing to clean up contaminated sites can benefit from – provided the business in question is not responsible for this contamination.
Along with the Super Deduction and Enhanced Deduction measures announced in response to the Coronavirus pandemic, these green capital allowances can make a big difference to relevant businesses. If you would like to find out how we can help you make the most of them, get in touch with our experienced and professional team on 0121 456 0190.