Green business highlights from the Autumn Statement
New funding and tax breaks for low emission vehicles were among the few green announcements in the Autumn Statement, the government’s first budget statement since the European Referendum.
Chancellor Philip Hammond’s first Autumn Statement, published on 23 November, was also the last – from 2017 the government will release its Budget in autumn, with a fiscal statement instead coming in spring.
Little information was provided about the government’s forthcoming emissions reduction plan, which is expected in spring 2017. The government stated that it is “committed to decarbonising the economy while limiting costs on bills, and will continue to engage stakeholders” as it develops its plan.
However, the government did announce that it is considering the future of the Levy Control Framework, the budget for green energy subsidies paid for by the taxpayer. The government has already overspent on its £7.6 billion cap to 2020, which could mean greater constraints on any new subsidies before 2021.
In other energy-related news, the carbon price floor, which imposes a cost for every tonne of carbon emitted by businesses using fossil fuels to generate electricity, will be maintained at its current rate until 2020.
The government’s biggest green announcement was a new £390 million investment by 2020-21 to support the rollout of ultra-low emission vehicles (ULEVs), renewable fuels and driverless cars.
The commitment includes £80 million for electric vehicle charging infrastructure, £150 million for low emission buses and taxis, £20 million for the development of alternative aviation and HGV fuels, and £100 million for new autonomous vehicle testing.
From now until the end of March 2019, the government is also offering 100 per cent first-year tax allowances to companies investing in their own chargepoints for electric vehicles, meaning that the cost can be written off against taxable profits.
The measure supplements the recently-announced £7.5 million workplace fund for chargepoints.
Company car tax bands and rates will also provide stronger incentives for purchasing low emission vehicles from 2020-21, with new lower bands to be introduced for the lowest emitting cars.
Company cars that emit more than 90g CO2/km will see their tax rise by an extra one per cent from 2020.
In a further move to increase the tax benefits of investing in low emission transport, it was also announced that salary sacrifice schemes for low emission cars and Cycle to Work initiatives will be exempt from a decision to remove tax and National Insurance benefits from similar benefit-in-kind schemes.
In a separate announcement, the government revealed that it will boost spending on research and development by £2 billion a year by the end of this parliament to support collaborations between business and the UK’s science base.
The new funding will include an Industrial Strategy Challenge Fund, managed by Innovate UK, to back priority technologies such as robotics, advanced materials manufacturing and industrial biotechnology.
The government also committed to review R&D tax incentives to improve incentives for innovators and tech investors.
Dr Ruth McKernan, chief executive of Innovate UK, called it a “game changing opportunity for businesses”, adding that it would “put business-led innovation at the heart of the [UK’s] industrial strategy”.
In other news, the government announced it will invest £170 million in flood defence and resilience measures over the course of the parliament – £20 million of which will be for new flood defence schemes.
The measure follows the launch of a new action plan and web portal to help businesses in flood risk areas install resilience measures.
Posted under General Interest and Environmental Regulations and Legislation on 29 November 2016