B1.1.1 Financial Instruments continued (2)


The Climate Change Levy

The Climate Change Levy applies to businesses. It does not apply to domestic users or charity use for non-business purposes. It is charged at set rate per unit of energy, which increases in line with inflation each April. It applies to electricity, natural gas, coal and coke. The tax is collect via the energy suppliers.

It is designed to encourage businesses to reduce their energy consumption or use energy from renewable sources.

Enhanced Capital Allowances

Organisations can claim an enhanced capital allowance for 100% of the cost of certain types of equipment. This includes equipment that is energy or water saving and also low carbon-dioxide emission cars.

The allowance allows the organisation to write off the whole cost of these against your taxable profits in the period during which you make the investment. The benefit is that this should help cash flow.

Land Remediation Tax Relief

If a business cleans up contaminated land, it may be able to claim tax relief of up to 150% of the clean-up cost. To qualify, the land must be:

  • In the UK.
  • Acquired by the company to carry out its trade or property letting business.
  • Already contaminated at the time it was acquired.

In addition, the contamination must not have been caused by action or inaction of the company (or a person with a relevant connection to the company).

For the purposes of this relief scheme, land is classed as contaminated if there is a chemical substance in, on or under the land that has the potential to inflict harm to humans, ecosystems or water sources.