UK
Ireland
Environmental tax
ESG, net zero, plastic pollution and energy prices are high on the agenda for businesses and the Government. Environmental taxes are a key tool in the drive to achieve behavioural change and meet environmental objectives.
Environmental tax includes a range of individual operational taxes payable by businesses and aimed at making companies more environmentally friendly. Companies causing damage to the environment or polluting pay more. Sometimes, they are referred to as ecotaxes or green taxes.
The green tax environment
Many businesses are now liable for environmental taxes. Different taxes and combinations of taxes apply to different sectors.
How S&W can help you with environmental tax
Our dedicated environmental tax team has extensive experience dealing with a variety of issues:
- Advising a range of companies, from packaging manufacturers to retailers, on plastic packaging tax implementation and compliance, and leading multinational implementation projects in Spain and Italy
- Representing landfill site and quarry operators on high-value landfill tax enquiries and disputes with HMRC
- Advising energy sector businesses on the tax implications of new energy generation and distribution models, including renewable energy, green gas, combined heat and power plants, hydrogen and battery storage
- Advising manufacturing businesses on available energy reliefs and managing these effectively
- Advising companies on the aggregates levy’s impact on large-scale construction and development projects and securing agreements with HMRC
For more information on how we can help you and your business with environmental tax, speak to a member of our team.
Frequently asked questions about environmental tax
Who pays environmental taxes?
Environmental taxes initially affected relatively few businesses. New taxes, such as plastic packaging tax and windfall taxes on energy companies, however, mean that environmental taxes now affect a broad range.
In the UK, the main environmental taxes relate to packaging, affecting many retail companies, and energy usage, affecting the technology sector and many less obvious industries.
What are the different types of UK environmental taxes?
UK environmental taxes include the following:
- Plastic packaging tax
- Windfall taxes on energy companies
- Climate change levy
- Energy reliefs
- Landfill tax
- Aggregates levy
Our environmental tax team can help you see if your business is liable for any of these taxes and ensure you are making full use of the reliefs available.
Is environmental tax direct or indirect?
Most environmental taxes are indirect taxes levied once in the supply chain by the taxable person. Who the taxable person is depends on the tax being charged:
- the manufacturer or importer of plastic packaging for plastic packaging tax
- the landfill site operator for landfill tax
- the energy supplier for the climate change levy
- the quarry operator for the aggregates levy
Windfall taxes on energy are treated differently. They are direct taxes administered through the corporation tax return.
How are environmental taxes important as policy tools?
Although environmental taxes are only levied once in the supply chain, they impact the market price of goods and services and affect pricing throughout the supply chain. By increasing the cost associated with the behaviour the Government wants to discourage, these taxes encourage alternative, less polluting behaviour by everyone.