Tax breaks to encourage energy efficiency

Tax breaks are on offer as an incentive to encourage you to adopt certain environmentally responsible practices. For example:

• Using sources of energy that have less environmental impact can make your business eligible for a reduction in the climate change levy.
• You can benefit from investing in certain plant and machinery through tax breaks called capital allowances (CAs).
• You can also use CAs for investing in company cars that have low CO₂ emissions.
• Businesses that frequently travel in and out of the congestion charging zone in London may be eligible for a discount if vehicles use alternative fuels.

If your business is in an energy-intensive sector, you may need to have an emissions trading permit. See the page in this guideline: Comply with emissions trading requirements

Read more on: Environmental tax breaks and obligations

Further information

• HMRC: Capital allowance for low emission cars
• Carbon Trust: SME guide to financing energy efficiency projects
• You can get help to develop a more circular approach to your business activities from a number of business support organisations. This can be in the form of advice and training as well as funding opportunities. 
  • In Northern Ireland see our page:  Business support organisations  - Northern Ireland
  • In Scotland see our page: Business support organisations  - Scotland