The general idea behind the government offering green taxes and reliefs to businesses up and down the land is to encourage you to act in a more environmentally friendly manner; whether you’re a large organisation using a significant amount of energy annually, or you’re a SME that hardly uses any energy at all.
It should be remembered that, at a more general level, you can claim capital allowances when you purchase energy-efficient or low/zero-carbon technologies for your company, reducing your overall tax payments.
Below, and in no order, we’ve detailed five of the most common taxes, reliefs, and schemes that are likely to be utilised by the widest range of companies across industries:
The Climate Change Levy
The Climate Change Levy (CCL) contains two distinct rates, the main rates and the carbon price support (CPS) rates:
- Main Rates: Fuels such as electricity, gas, and solid fuels including coal, coke, petroleum coke, and lignite fall under the CCL main rates, so long as your business is in one of the industrial, commercial, agricultural, or public services sectors.
- CPS Rates: Fuels such as gas, liquefied petroleum gas (LPG), and coal (and similar solid fossil fuels) fall under CPS rates if you use low carbon technology for producing electricity.
It should be noted that you don’t have to pay the CCL if your business only uses a small amount of energy, you’re a charity completing non-commercial activities, or you’re a domestic user.
The CRC Energy Efficiency Scheme
Also known as the Carbon Reduction Commitment, the CRC Energy Efficiency Scheme applies to you if you’re a large, non-energy-intensive business (an SME is a good example), such as a retail store, local authority (such as a state-funded school), or hotel.
Once registered, you must monitor and declare your CO2 emissions from your electricity and gas usage, as well as purchase appropriate allowances to cover your annual energy emissions.
The EU Emissions Trading System
The EU Emissions Trading System (EU ETS) focuses on large businesses not covered by the CRC Energy Efficiency Scheme who are working in energy-intensive sectors. The EU ETS allows you to buy and sell greenhouse gas emission allowances with a view to go ‘green’ and reduce the environmental impact of your business over time.
To do this you must regularly calculate your greenhouse gas emissions and work to meet targets such as cutting your overall business emissions, and trading your allowances.
The Landfill Tax
Regardless of the size of your business, if you dispose of waste using landfill sites you’re required to pay a landfill tax on top of your standard landfill fees.
Your tax will be based on the weight of the waste you’re discarding, with a lower rate of £2.50 per tonne applying for ‘inactive waste’ and a higher rate of £80.00 per tonne applying for active waste.
The Aggregates Levy
The Aggregates Levy is, simply put, a tax on rock, sand, and gravel that is taken from the ground or dredged from the sea (so long as it’s taken from within UK waters).
The Aggregates Levy makes it necessary for you to report the quantity of aggregates your have both produced and sold to HMRC every quarter, with you then being taxed £2.00 per tonne. The tax must still be paid if you import said materials, though you can get tax relief if you export your aggregates or use them in particular agricultural or industrial processes.
There are a number of materials exempt from this tax, including coal, lignite, shale, slate, clay, industrial minerals, soil (in certain circumstances), vegetables or other organic materials, cut building stone, lime, and cement.
Green Taxes and Reliefs … Go Green, Save Money
To speak with a professional to discuss which green taxes, reliefs, and schemes your company could benefit from, contact us today on 020 8780 2349 or get in touch with us via our contact page to arrange a complimentary, no obligation meeting.
This blog is a general summary. It should not replace professional advice tailored to your specific circumstance.