With the recent Cop26 climate summit, the environment is currently a hot topic, and sadly not for all the right reasons…So what can you be doing to grow your business but in an environmentally friendly way?
Our blog takes a look at the top four ways in which you can adopt a green approach to running your business, whilst also saving on tax.
- Electric car owners enjoy the lower rate Benefit in Kind (BiK) tax
The tax for electric cars for the tax year 2021/22 versus their petrol or diesel counterparts is substantially lower, meaning if you go green you could be saving on tax. And whilst it’s low at 1%, it’s only rising to 2% for the tax year 2022/23, so buying now will mean only a small increase to forecast for next year.
By providing businesses with this incentive, the Government is hoping that more and more will go electric, which will in turn reduce each person’s carbon footprint to and from business meetings.
- Electric vehicle charging point vouchers
If you do decide to go electric, you’ll want to know where to be able to charge your car! Take a look here for a map on the places you can charge for free.
Via the Workplace Charging Scheme, the Government’s Office of Low Emission Vehicles (OLEV) has provided a tax incentive to encourage small business owners to install their very own EV charging points. Company owners can get vouchers up to the value of £350 per socket, with a maximum of 40 sockets per applicant.
- Get on your bike!
For the past 20 years the Cycle to Work scheme has been successfully peddling along, allowing thousands to enjoy the salary sacrifice scheme. By giving employees the ability to use road bikes completely tax-free, not only is it a cheaper alternative to driving to work, it’s also greener and helps to keep you fit!
As an employer of your Limited Company, you’re also able to claim for the full cost of your bike, whilst also saving National Insurance Contributions (NICs) up to 13.8% of the bike’s total value.
- Tax reliefs available to the research and development of greener products and / or services
If your Limited Company is investing in the research and development (R&D) of advances in technology and science in your field of expertise, you may find that you’re eligible for R&D tax relief or even tax credits.
R&D tax credit allows your business the chance to claim a repayable tax credit (14.5%), which could help with your company’s cashflow during periods of growth. To ensure you’re eligible for the tax relief, be sure to run it past your specialist contractor accountant. R&D tax rules can be complex and open to misinterpretation, so always be sure to ask your accountant for help, who will be able to ensure your business is eligible, and claimed in the correct way.
How Aardvark can help
The expert team here at Aardvark are on hand to assist Limited Company contractors just like yourself, every day of the year. If you’re on the lookout for an accountant you can trust, who’s able to show the way when it comes to saving money on tax and maximising your take home pay, get in touch today.