MP Chris Skidmore recently published the final report called Mission Zero and made 129 recommendations. A few of those were specifically around tax policy, so I've summarised them here ...
There are many recommendations in the net Zero report!
The overarching recommendation is that by Autumn 2023, the Treasury should publish its own review on how policy can be used to incentivise investment in decarbonisation, and that should include statements on how the tax system and capital allowances can contribute to that.
"This could include research priorities, government support, tax credits more targeted R&D spending and better regulations!"
The Government is already seeking to address some of this. They have a consultation running about better-targeted support for green technology, but I do feel that more could be done to help businesses transition. Reliefs need to go beyond just R&D to actually incentivise the use of low-carbon technologies.
And how about a successor to the super-deduction? I support any move to incentivise investment in green technology, but I wonder if capital allowances will actually increase investment? Tax reliefs will help, but when we're all suffering from cash flow issues during a wobbly economy, will it be enough?
"Loans, grants and direct funding may be a better path!"
Changes to indirect taxation are also being considered in the report. It recommended that VAT be cut on product repairs (rather than replacing something, why not fix it?) and making the zero rate on energy-saving materials permanent.
And there is a discrepancy in the cost of charging electric vehicles domestically and at public charging points. Currently, it's a 5% charge for home charging, but is 20% on a public charger. The report suggests these need to be harmonised.
There are many other recommendations in the report and I particularly like the part about delivering green jobs with more flexibility for the apprenticeship levy, aligning it with the Government's own net zero and growth priorities.
Reforms to fuel duty and road taxation are also considered, but I am a little disappointed that there was no roadmap for reform, especially as this has a major effect on the long-term sustainability of the public finances.
If you'd like to read the report yourself, you can download the PDF by clicking here.
Until next time ...
ROGER EDDOWES Business Godparent
Would you like to know more?
If anything I've written in this blog post resonates with you and you'd like to discover more about this Net Zero report, it may be a great idea to call me on 01908 774320 and let's see how I can help you.
Don't forget to stay updated with our daily social media posts on Facebook.
Roger trained at Edward Thomas Peirson & Sons in Market Harborough before working at Hartwell & Co, followed by Chancery, as a partner. He started Essendon Accounts and Tax with Helen Beaumont in 2014 as a general practitioner with a hands-on approach.
Roger loves getting his hands dirty, working with emerging, small-to-medium and family businesses to ensure they receive the best possible accountancy advice. Roger utilises an extensive network of business contacts to leverage the best guidance and practical solutions.
No unauthorised use, duplication, distribution or modification to any original content contained within this blog is permitted without prior written permission of the author. All other trademarks and registered names are acknowledged.
