There has been much debate and controversy following the 26th UN Climate Change Conference of the Parties (COP26) held in Glasgow earlier this month. Whilst the intention of the summit was to accelerate action towards the goals of the Paris Agreement and the UN Framework Convention on Climate Change, what can we do as businesses to improve our own carbon footprint? At LWA, we provide some comment in our latest blog below, as well as highlighting some tax reliefs available for going green.
Buyer attitudes are changing
Consumers are now keen to support eco-friendly businesses, and buying habits are changing as people seek to minimise their impact on the natural environment. By incorporating eco-friendly ideas into your business, you can align your brand’s ethos with that of your customer base.
If you are running a small business, you might think that your environmental impact is inconsequential but the people buying your products or services don’t see it that way. Customers are starting to vote with their wallets – they want to support the green agenda.
Change your resources
Businesses can start their eco efforts by choosing to purchase and use sustainable products from paper through to packaging, etc. You can go a step further and introduce recycling facilities in your offices too.
Your firm can choose to do business with green suppliers only. Whether that is net zero emission web hosting or carbon neutral suppliers in your supply chain - every little bit helps.
Your business could make efforts to reduce its carbon footprint by switching to energy efficient appliances, LED lighting, smart thermostats, solar panels and so forth, and potentially benefitting from the Super Deduction tax relief announced in the Spring Budget by doing so.
Your business can also make an effort to reduce its waste or even reduce its water usage in order to help to protect the environment. Conservation is just as important as recycling, after all.
Encouraging staff to work from home where possible can also help to reduce CO2 emissions by reducing the number of cars on the road. However, where driving for work is a necessity, you can consider a greener option such as electric company cars with significantly reduced Benefit in Kind (BIK) tax for the employee.
For company cars with low emissions, like hybrid vehicles and electric cars, there have been cuts to the amount of tax payable. Electric vehicles BIK rates fell from 16% in 2019/20 to 0% in the 2020/21 financial year. This rate has increased slightly to 1% in 2021/22 and will increase to 2% in 2022/23.
As the result of recent increases in petrol and diesel prices, HMRC increased the advisory fuel rates that apply for the reimbursement of employees' private fuel for their company cars from September 2021. The rates are shown in the table below (with previous rates in brackets), and in comparison, for wholly electric cars there was a 4p advisory rate.
1400cc or less
1600cc or less
1401cc to 2000cc
1601 to 2000cc
(Employees who have all the fuel for their company car paid for, should consider reimbursing their employer for private use to avoid a private fuel benefit being charged).
Offset your carbon emissions
Finally, for those parts of your firm’s operations that can’t become more environmentally friendly (for whatever reason), you can look into offsetting your carbon emissions.
There are a variety of carbon offset credits available on the market today. A carbon credit represents either the permanent removal of a tonne of CO2 from the atmosphere or the avoidance of one tonne of CO2 being emitted in the first place.
LWA are here to help
If you would like further advice on how you can benefit from tax reliefs by becoming a more eco-friendly business, the team at LWA are here to guide you. Speak to one of our friendly tax experts in Manchester on 0161 905 1801 or in Warrington on 01925 830 830, or you can email us to email@example.com.