A More Sustainable Future: Carbon Rates Offset
The UK led the first industrial revolution, and now we are at the forefront of a green industrial revolution. Green growth requires large scale changes in the behaviour of both business and leadership. Taxation could be a key policy for providing clear and sustained incentives to reduce environmental damage as we tackle climate change head on. Businesses need certainty that the investment they make to reduce the scale of environmental damage will be financially worthwhile. With the Government yet to outline firm plans or new measures to reach net zero carbon emissions by 2050, the business rates system could be leveraged to stimulate investment in energy efficient and carbon abatement solutions. Despite the growing urgency to address energy demand and emissions from buildings, current levels of investment fall short. Driving change through turning non-domestic properties green or eco-friendly requires investment which is currently financially penalised.
Stephen Philp, MRICS MCMI, Rating Chairman, Altus Group
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Where a business adopts sustainability within their process to reduce their carbon footprint it should be for the benefit of the ‘planet’ not the public purse. It simply makes no sense to penalise businesses for lowering their emissions.
The Wood committee last redefined the classes of plant and machinery included within business rates bills in 1993. They are now wholly inconsistent with the Government’s initiatives on energy efficiency and climate change. In England, the rating of plant and machinery is expressly governed by statute. The Valuation for Rating (Plant and Machinery) Regulations 2000 set out four classes of rateable plant and machinery. Class 2 covers plant which provides services to a property. In this Class “services” can be defined as heating, cooling, ventilating, lighting, draining or supplying of water and protections from trespass, criminal damage, theft, fire or other hazard. As a direct consequence, many items can be rated separately increasing taxation costs.
What counts as plant and machinery?
A MORE SUSTAINABLE FUTURE: CARBON RATES OFFSET
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Air conditioning / air handling (floor area served by system (sq m)
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CCTV security system (only if 4 or more cameras)
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Fire protection / detection / alarm / suppression (area covered by sprinkler system (sq m)
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Lifts (floors served and capacity, whether goods or passenger)
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Air compressors (whether screw or piston). Free air flow capacity in cubic metres per hour, or cubic feet per minute. (CMH / CFM)
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Renewable energy items (presence of solar panels / wind turbine, and their generating capacity in kilo Watts (kW)
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Cold stores (whether built in or free standing as well as gross floor area)
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Uninterruptible power supply / standby generator (size of generator in kilo Volt Amps (kVA)
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