Spotlight On: Making Sustainability Work for Your Business
Spotlight On: Making Sustainability Work for Your Business (and Your Tax Bill)
If you’ve been investing in greener ways of running your business - whether that’s upgrading your premises, switching to electric vehicles, or doing your bit to cut carbon - you might be missing out on some serious tax relief.
The UK tax system is now wired to encourage sustainable action, and there are several reliefs that could take a decent chunk off the cost of your eco investments. Some are permanent, others are time-sensitive, so it’s worth understanding what’s available and when to act.
Here’s a quick run-through of the key tax breaks available this tax year - and how I can help you make the most of them.
Why sustainability makes financial sense
We’re not just talking about helping the planet. There’s growing consumer demand for greener businesses, and government-backed incentives to support those who are getting on board:
- Low-carbon businesses generated over £69bn of turnover and 272,000 jobs in 2022.
- Environmental taxes brought in £52.5bn in 2023.
- Battery-electric car sales are up 25.8% year on year (as of May 2025).
Sustainable investment isn’t a niche trend - it’s mainstream. And the tax system’s catching up.
Capital allowances you can claim this year
Full Expensing (Companies Only)
Companies paying Corporation Tax can deduct 100% of the cost of qualifying plant and machinery (things like solar panels, EV vans, heat pumps). That’s 25p off your tax bill for every £1 you spend—pretty powerful.
➡️ Tip: Keep supplier invoices and product specs that prove the item is energy-efficient (e.g. MCS-certified heat pump).
Annual Investment Allowance (AIA)
For unincorporated businesses or if your company’s maxed out full expensing. It covers up to £1 million of spend and works well for things like lighting or wiring during property upgrades.
Zero-emission cars, vans and charge points
You can claim 100% first-year relief on these up to March 2026 (or April 2026 if you're not a company).
➡️ Benefit in kind rate: Still just 3% for EVs in 2025/26—way below the 37% rate on high-emission cars.
Running an EV salary-sacrifice scheme? Let me know as soon as you have interest so I can help you forecast the employer NI saving.
Property and land incentives
Land remediation relief
Got contaminated or derelict land? You might get 150% tax relief or a cash credit worth 16% of costs—great if you’re dealing with asbestos, knotweed, or crumbling buildings.
Structures & Buildings Allowance (SBA)
A solid 3% straight-line deduction for new or upgraded commercial premises—even if they include sustainable features like green roofs or high-performance insulation.
Freeports & Investment Zones
If your business is based in one of these “special tax sites”, you could unlock:
- 100% first-year plant & machinery relief
- 10% SBA on new buildings
- Stamp Duty and Business Rates relief
➡️ Important: Let’s confirm you’re inside the zone before signing contracts—we can map it out together.
R&D Tax Relief (now streamlined)
From April 2024, there’s a single scheme offering a 20% credit on eligible R&D spend—worth 15–16.2% net depending on your tax rate.
Innovations like recyclable packaging, energy-saving software or low-carbon materials all count.
➡️ Tip: Keep a simple monthly log of what your team is working on—this makes year-end claims smoother and more robust.
Other ways to save
- Climate Change Levy Relief – Up to
92% off electricity and
89% off gas if you sign a climate agreement.
- VAT Zero-Rating – Still in place for solar panels, heat pumps, insulation, and more until
March 2027.
- Grants & Schemes – These change often, but the Boiler Upgrade Scheme (worth £7,500) and local net-zero funding are good places to start. Let me know if you’re applying and I’ll help with the tax side.
How I can help
From checking you’re within your limits to handling paperwork, grant interactions and planning ahead, I make sure the numbers—and the timing—work in your favour.
Here's what I do for you:
✅ Track allowances and flag when you're close to a threshold
✅ Check grant/tax interactions
✅ Run profit forecasts to plan major purchases smartly
✅ Prepare R&D claims and keep them HMRC-compliant
✅ Record and categorise green assets for future proofing
Next steps
Green upgrades can be a big investment—but they don’t have to come with a big tax bill. If you’re planning to improve your premises, invest in EVs or launch an innovation project, get in touch early.
The sooner we talk, the more options we’ll have to make your investment tax-smart as well as future-proof.
