Renewable Energy Tax Explained

Environmental taxes encourage businesses to operate in a more environmentally friendly way. With the energy price cap set to increase again in October, now is the best time to consider the renewable energy and tax relief options available to you and your business.

What’s available?

On 31st March 2021, the 50% First Year Allowance (FYA) was announced to support the UK economy. It is the biggest two-year tax cut in British history.

Solar panels are qualifying assets under the 50% First Year Allowance scheme. This means that by investing in solar, you will only pay corporation tax on your operating profits minus 50% of the value of your solar investment.

For example..

The 50% First Year Allowance means that you only pay corporation tax on your profits minus 50% of the value of the solar roof.  Here’s a simple example.

  • Your Solar PV investment is £240,000.00
  • You get a 50% capital allowance on this = £120,000.00
  • You apply the corporate tax rate (19%) to the capital allowance = £22,800.00
  • Your tax saving by investing in solar is £22,800.00!

Moorgate Finance has worked with a portfolio of businesses to fund a range of renewable products, to not only support them to go green but to help them reduce their energy costs and make their operations more efficient.

With extensive experience in renewable energy, our team have created bespoke funding packages for different products and to meet different business needs.

Now is the best time to invest in renewable energy for your business. If it’s something you’ve been considering or if you’d like more information, call our friendly team on 01908 92 62 62 or email us: info@moorgatefinance.co.uk.