| Firms want green tax cash ring-fenced |
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| Tuesday, 06 November 2007 | |
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Almost 90 per cent of businesses believe that the Government is using money raised through green taxes to help meet the shortfall in public finances instead of using it to tackle climate change.
According to a survey by accounting group UHY Hacker Young, 91 per cent of businesses want to see green tax revenue ring-fenced into a fund for tackling climate change in order to prevent it from being used for general government expenditure or to fund government pet projects like the Olympics. Recent calculations made by the firm reveal that the Government hands back just 2 per cent of the money it takes in green taxes to environmentally-friendly taxpayers through green tax breaks. Figures provided by the Treasury under the Freedom of Information Act show that the Government raises £29.3 billion in green taxes each year but gives back just £549 million in green tax breaks. The Institute of Chartered Accountants (ICAEW) has recently called for all - or at least a substantial part - of the revenue raised through taxes labelled as “green taxes”, to be targeted towards reducing carbon emissions. Roy Maugham, tax partner at UHY Hacker Young, says that there is still a feeling of distrust surrounding the Government’s attempts to tackle climate change, particularly within the business community. “Gordon Brown’s enthusiasm for reducing the UK’s carbon emissions is viewed with suspicion by many who think that green taxes are a very convenient way of plugging the widening gap in public finances under the façade of tackling climate change” according to Maugham. Government needs to work harder The research reveals that 56 per cent of businesses believe the UK’s competitiveness could be compromised by further green taxes and regulations. In particular, 65 per cent believe that the costs to business of meeting targets set by the Government to reduce carbon emissions by 60 per cent by 2050 will outweigh the benefits. Maugham feels that many businesses fear that they will be forced to bear the brunt of tackling climate change through increased taxation and yet more red tape that will place too onerous a burden on them to remain competitive with the US, China and India. He says that for many the belief remains that tackling climate change on a unilateral basis and remaining competitive do not go hand-in-hand. In their view, more taxes and regulations will push up prices and put UK businesses at a disadvantage. “The business community would view the Government’s commitment to tackling climate change with far less suspicion if there was more transparency about where the money raised through green taxes is being spent,” Maugham remarks. The research also reveals that just 50 per cent of respondents believe that extra tax breaks should be available for companies that are developing green technologies and those who invest in green technologies . Maugham says that the Government will need to show more success in tackling climate change through global initiatives to get UK businesses on its side. “The Government has failed to foster much enthusiasm for green technologies amongst the business community. Only half of respondents believe that their businesses should subsidise other businesses that are seeking the green pound,” he concludes. Related links |
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