The Finance Leasing Association (FLA) has announced a Green Finance Wholesale Guarantee to Finance Minister Rishi Sunak, calling on corporate taxes to be reformed to make green investment more affordable.
The Prime Minister issued an autumn budget statement on October 27, and the FLA issued a submission to the government. This includes several measures that will help businesses reduce their energy consumption on the road to net-zero emissions.
At the heart of the proposal to help companies “decarbonize their finances” is the Green Finance Wholesale Guarantee recommendations to ensure affordable funding for green assets in the consumer and business financial markets.
Lender involvement is government net, as lending is often “the only way to keep more environmentally friendly vehicles, plants and machinery, home refurbishments, or office equipment within the reach of customers” in FLA. He said it should be central to the Zero Plan.
The government wants to introduce a system that eliminates the high levels of credit risk often associated with green products as a result of the uncertainties associated with depreciation and obsolescence of green products.
FLA Director Stephen Haddrill explained how, if budget submissions are made, they can help make green investments even more cost-effective.
He states: “Risk is a problem that can be mitigated over time if you have enough data to calculate the residual value and an established secondary market to sell used assets, but in the case of the government net. Time is a luxury we don’t have. We need to reach our zero goal.
“The government schedule does not allow this market to grow at its own pace, so we need to share the risks.
“Therefore, we recommend a portfolio-based green finance wholesale guarantee scheme that will be implemented from 2022 to 2026.”
The FLA budget submission also includes a recommendation to reform corporate tax rules to allow “full spending” so that companies can immediately deduct the cost of their investment rather than diversify over the life of their assets. It is.
If full spending was introduced in other countries, it would have resulted in significant investment growth, he said.
FLA’s proposal is that the News Insight feature, published in the November issue of AM Magazine, could force many car retailers to invest in NetZero’s future as a result of soaring gas and electricity this winter. Because I concluded that there is.
However, MHA’s tax director Nigel Morris said in the latest version of AM that green technologies such as electric vehicle (EV) charging points, solar panels and wind turbines will be over-deducted from the government’s current 130% tax. He said he was disappointed that it was not included.
Morris said such investments should now come from dealer radar.
“In the past, car dealers have always seen these things and compared them to things like the price of new slopes in the workshop,” he said.
“But as energy costs continue to rise, the ROI of those items will change. Solar panels that may have achieved an ROI of 8 to 10 years are now back, for example, 4 to 6 years. There may be. “
Earlier this week, ministers announced that the UK government would allocate £ 620 million to EV infrastructure, including a zero-emission vehicle subsidy and funding for local EV infrastructure, as part of this. Newly announced Net Zero Strategy.
It has also allocated an additional £ 350m to the £ 1Bn Automatic Transmission Fluid (ATF) to support the electrification of UK cars and their supply chains.
FLA urges government to support “financial decarbonization” of businesses
Source link FLA urges government to support “financial decarbonization” of businesses