5 Tax Incentives to Help Make Your Business More Sustainable

Sustainability has become something of a buzz word recently, and with the increasing threat of a climate disaster and consumers demanding action, it’s something that businesses across sectors and industries should take seriously.

Why is Business Sustainability Important?

We get it, the economy isn’t in the best shape right now and there are a lot of other costs that businesses need to prioritise.

However, investing in sustainability is a great way to future proof your business, stay a step ahead of your competitors and potentially avoid taxes on unsustainable practices.

Although we wish we could snap our fingers, make our businesses sustainable and save the planet overnight; this just simply isn’t possible.

A lot of the investments needed are simply out of the budget for small business owners. However, at RAM Accountants we are here to let you in on some tax assist programmes that will help with the costs of making your business more sustainable without breaking the bank.

  • Tax-Deductible Electric Vehicles
  • Financial Support to Install Electric Charging Points
  • Cycle to Work Scheme
  • Claim Capital Allowances for Energy Efficient Technologies
  • Research & Development Tax Relief

Electric Vehicles are Tax-Deductible

Who doesn’t love a tax-deductible shopping spree?

Small businesses that invest in a fully electric vehicle pay very low levels of company vehicle tax and can even receive a full tax deduction on the purchase of the vehicle.

If you do decide to invest in an electric vehicle, the vehicle must be delivered before the end of the year to ensure that it qualifies for corporation tax relief in that financial year.

Although electric vehicles are a significant investment, there are lots of options available on the market. Not only is the technology is improving but prices are decreasing year on year. So, if your business is looking for a new vehicle why not consider an electric option?

Financial Support to Install Electric Charging Points

Ok, so you have your new electric vehicle, but where are you going to charge it?

Well, the UK Office of Low Emission Vehicles (OLEV) offers an exciting tax incentive for small businesses to install electric charging points on their premises via The Workplace Changing Scheme[1].

The scheme provides financial support to help cover the purchase and installation costs associated with electric vehicle charging points of up to £350 per socket and up to a maximum of forty charging points per application[2].

Cycle to Work Scheme

The government’s Cycle to Work Scheme aims to promote alternative ways to travel to the workplace. The scheme offers employees who want to cycle to work the opportunity to receive a tax break to invest in a bike and the necessary accessories[3].

The scheme has been running for over twenty years and has begun to grow in popularity following the increase cost of fuel, the threat of a climate disaster and the increased awareness of the benefits of exercise.

But it’s not just the employee’s tax that benefits from the Cycle to Work Scheme as employers can also claim tax relief for the full cost of the bike and National Insurance Contributions of up to 13.8% of the bike’s value simply for participating in the programme[2].

So why not encourage your staff to get on their bikes and cycle to work? We suggest turning it into a friendly competition to see who cycles into work the most.

Claim Capital Allowances for Low Carbon Investments

Have you got your eye on a new piece of sustainable equipment that will not only take your business to the next level but will also help to reduce your carbon footprint? Well, we’ve got good news for you.

The UK Government’s Enhanced Capital Allowance (ECA) Scheme provides a 100% tax break for the first-year allowances on low and zero carbon investments for your business. Meaning you can write off the entire first-year costs of these investments against your annual taxable profits[4].

The scheme is open until April 2026 and only applies to some locations so make sure to check with your accountant to ensure you are eligible.

Research & Development (R&D) Tax Relief

The Research and Development Tax Relief Scheme is available to companies that focus on innovative projects in science and technology.

The scheme allows companies to deduct an extra 130% of their qualifying costs from their annual profit, as well as the usual 100%deduction. This equals a total tax deduction of 230%[5].

Unfortunately, there’s eligibility requirements. Your business must be developing a project that looks to advance science and technology, overcome uncertainty or overcome a problem that cannot easily be solved by a professional in the field.

Your business can claim R&D tax relief if you have less than 500 employees and an annual turnover of under €100 million. With the increased need for sustainable innovation, this could be the perfect opportunity to receive support on your current projects that meet the requirements.

Benefits of Having an Accountant

This is great and all but what’s even the point in having an accountant?

Well, not to blow our own trumpet but accountants perform a range of tasks that have many benefits to your business.

·        We analyse the data that helps to guide key business decisions.

·        We help to make managing business finances less daunting.

·        We get on with the accounting while you focus on other, and some may argue more interesting, aspects of your business.

·        We know what we’re talking about and help to reduce mistake or fines for non-compliance.

·        Finally, we help to save you money with reduced tax liability schemes such as the ones we’ve discussed above.

At RAM Accountants, we have over 25 years’ experience working tirelessly with and on behalf of your clients

We specialise in small business accounts and our approach of providing real time information allows for tax planning in advance meaning action can be taken to address various business concerns or activities.

We pride ourselves on being both approachable and providing an accessible service and the satisfaction of our clients has always and remains to be our number one priority.

Feel free to contact us through the details below for more information about how we can help you get back to focusing on what’s important, building your business.

Telephone: 01355 267302


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