Tag Archives: Budget

  • -
Investment Super deduction Budget 2021

Super-deduction: HM Treasury introduces a new investment incentive in the 2021 Budget.

Tags : 

Businesses can claim 130% capital allowances on qualifying plant and machinery investments between April 2021 and March 2023, cutting taxes by up to 25p for every £1 spent.

In an effort to spur on business investment, which has fallen from already-low levels through the Covid pandemic, Rishi Sunak announced this £25bn measure of relief which it’s hoped will kick-start capital expenditure to boost UK productivity and international competitiveness.

Investment Super deduction Budget 2021
Super-deduction: An incentive for UK capital investment

Why is a super-deduction being introduced?

Business investment has fallen by 11.6% between Q3 2019 and Q3 2020, from levels which were already low. Our business investment in the UK can be traced as a reason for the productivity gap with our main international competitors, and productivity growth in the UK has been slower than in many other countries.

The super-deduction is aimed at giving a strong incentive to make additional investments and to bring planned investments forward. This should promote economic growth.

How does the super-deduction work for business?

The super-deduction offers 130% first-year relief on qualifying main rate plant and machinery investments from 1st April 2021 until 31st March 2023. For most business equipment this will mean that for every £100,000 spent the corporation tax deduction will be £130,000.

With corporation tax relief at 19%, that is £24,700 compared to £19,000 without the new scheme or 18% of the cost per annum. This incentive is a substantial increase for the two year period.

If your business is considering capital expenditure, either as part of a drive to improve energy efficiency or for any other reasons, the super-deduction may be the incentive you need to accelerate your investment.

If you are thinking about investigating energy-efficient investments, contact our team of experts by emailing savings@envantage.co.uk or call us on 0800 054 2577 today.

  • -
Rishi Sunak 2021 Budget

The 2021 Budget from an energy perspective

Tags : 

UK Chancellor Rishi Sunak presented his Budget for the UK finances yesterday and whilst the main focus of his plans centred around repairing the national finances in the midst of the Covid-19 pandemic, there were a number of notable announcements regarding the energy industry in general and the promotion of the UK’s green ambitions in particular ahead of the UK hosting the COP26 UN climate summit late in the year.

Rishi Sunak’s 2021 Budget – Good for the energy sector?

A commitment to green growth

Having stated that the budget would provide a “real commitment to green growth” which would help to build a strong, fair and resilient future economy, the Chancellor unveiled several new initiatives, including:

  • A National Investment Bank to be headquartered in Leeds with an initial capitalisation of £12bn dedicated to environmentally focused projects in both the public and private sectors to stimulate the green industrial revolution.
  • A world-first National Savings and Investment (NS&I) retail savings bond specifically for the UK public to invest directly in environmentally friendly projects.
  • The issue of £15 billion of green gilts in the next financial year to help finance critical projects which tackle climate change and other environmental challenges, fund important infrastructure investment, and create green jobs across the UK.
  • New “green” mandate for the Bank of England to reflect the importance of environmental sustainability and the UK’s transition to net zero.
  • £68 million to fund a UK-wide competition to deliver first-of-a-kind long-duration energy storage prototypes that will reduce the cost of net zero by storing excess low carbon energy over longer periods.
  • £20 million to fund a UK-wide competition to develop floating offshore wind demonstrators and help support the government’s aim to generate enough electricity from offshore wind to power every home by 2030.
  • £4.8 million to support the development of a demonstration green hydrogen hub in Anglesey.
  • £4 million for a biomass feedstocks programme in the UK to identify ways to increase the production of green energy crops and forest products that can be used for energy.
  • Continuation of the Carbon Price Support rate at £18t/CO2e for 2022/23 in addition to the commitment of a UK Emissions Trading System (UK ETS) later this year.

The Chancellor also announced additional support for the UK offshore renewables sector, with port facilities in the North East of England to receive infrastructure funding from Government to support the development of the offshore wind industry supply chain. Sunak stated that: “Offshore wind is an innovative industry where the UK already has a global, competitive advantage, so we’re funding new port infrastructure to build the next generation of offshore wind projects in Teesside and Humberside.”

Some critical voices

Critics of the Chancellor’s policy statement noted however that there was no mention of the government’s much vaunted £1.5bn Green Homes Grant which had only been launched last year but is to come to an end in March after only £94.1 million worth of grants were issued. Further criticism of the budget came after Sunak again announced the cancellation of fuel duty escalator for the 11th year running with environmental groups claiming that the UK’s climate emissions are up to 5% higher than they would have been had the escalator been maintained since 2010 at a cost to the Treasury of over £11bn for 2019/2020.

Stay informed: Subscribe

Energy Compliance updates from Envantage Ltd

* indicates required

Please confirm that you would like to hear from Envantage Ltd:

You can unsubscribe at any time by clicking the link in the footer of our emails.