Renewable energy systems

Renewable Energy Systems

How to save your business money when investing in Renewable Energy Systems

Investing in solar panels and EV charging points for your business can now save you from paying as much tax under the government’s new super deduction scheme.

Due to the pandemic, levels of business investment have fallen. The government has introduced the “Super Deduction Tax” to encourage businesses to invest back into machinery and technology that will benefit productivity and sustainability.

Between 1 April 2021 and 31 March 2023 a UK company can claim up to 130% of their Capital Allowances back from the government on qualifying investments. Solar PV and EV charge points are both on the list of qualifying investments.

The super-deduction will allow companies to cut their tax bill by up to 25p for every £1 they invest.

For a company looking to spend £100,000 on a solar PV system, their taxable liability could be reduced as follows;

The company makes pre-tax profit of £200,000

CT due @19% – £38,000

Investing in a Solar PV / Storage / EV Chargers – £100,000

The company makes pre-tax profit of £200,000

Allowed super tax expense for tax calculation @130% = 200-130 = £70,000

CT due @19% – £13,300

So a CT saving of £24,700   (Actual saving due to extra 30% write off – £5,700)

This scheme is amongst the world’s most competitive and makes investing in solar energy or EV charging system very attractive.

As you will appreciate, tax information is always subject to change but you can check out the tax benefits with your own accountant or we can put you in touch with an independent tax adviser if you prefer.

Either way, if you want to find out more about the benefits of renewable energy, battery storage solutions and the latest solar systems for your business – please contact Graham now on 07870 222771.