Tax Relief for Green Investment in Business Assets
14th March 2016
The Government would like business owners to invest in energy efficient plant and equipment and the taxman therefore allows full deduction of the cost against their profits. For the last few years, it has been possible to claim up to £500,000 per annum on general asset purchases so this extra relief has been of limited value. Two factors may now make owners give ‘green investment’ further consideration:
The general limit has been reduced to £200,000 per annum – still enough for most businesses, but not for larger ones embarking on a programme of investment or moving premises.
Limited companies which are loss making can claim a tax credit of 19% of the expenditure on green assets if they pay sufficient PAYE and NIC on their payroll.
The equipment that qualifies for these ‘enhanced capital allowances’ (‘ECAs’) is listed at www.gov.uk/etl so it may be worth checking this when you are considering buying some new equipment for your business.
Clearly the pricing of the energy efficient gear needs to be looked at, but it is possible that the tax relief, added to the green credentials, could justify the cost.
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