In the UK, there are a number of tax reliefs available to encourage businesses and individuals to move towards a net zero carbon economy. These tax reliefs include:
- Enhanced Capital Allowances (ECAs) – ECAs allow businesses to claim a 100% first-year allowance on the cost of qualifying energy-saving equipment, such as low carbon emission vehicles and energy-efficient lighting.
- Climate Change Levy (CCL) exemptions – Businesses that generate their own renewable energy, such as solar or wind power, can apply for an exemption from the Climate Change Levy (CCL). The CCL is a tax on energy use that is designed to encourage businesses to reduce their carbon emissions.
- Green Gas Certification Scheme (GGCS) – The GGCS is a certification scheme that allows biomethane producers to claim a Renewable Gas Guarantee of Origin (RGGO) certificate, which can be used to demonstrate the renewable credentials of their product. These certificates can then be used by businesses to claim tax relief under the CCL scheme
- Energy Savings Opportunity Scheme (ESOS) – ESOS is a mandatory energy assessment scheme for large businesses that requires them to identify energy-saving opportunities within their operations. The scheme can help businesses to reduce their energy consumption and save money on their energy bills, as well as potentially qualifying for tax relief on energy-saving measures
- R&D tax relief – The UK government’s Research and Development (R&D) tax relief scheme provides tax relief to businesses that are carrying out innovative R&D projects in the field of clean energy and the reduction of carbon emissions.
These tax reliefs are designed to encourage businesses and individuals to invest in low-carbon technologies and reduce their carbon footprint. By using these reliefs, businesses can reduce their tax bill while also contributing to a more sustainable future.