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For many years energy supply in the UK has been neglected to the point where we have, due to recent immigration, a higher level of population earlier than otherwise would have been the case.
We do not use the coal we have because it is considered to be unclean fuel and we rely on oil and gas being imported from other countries and dependent upon the referendum of Scottish independence we may lose a large amount of UK oil reserves. We find ourselves significantly behind other countries who have spent many years developing technology which is now economically viable. However this technology has become and is becoming available in the UK for solar, wind and hydroelectric power in a way that is affordable for many small businesses.
On top of the present affordability financed by business savings or bank loans there is also the added bonus of the feed-in tariff typically for a twenty year period which is government subsidy contracted for by the purchaser of the equipment which pays a regular subsidy based on the power output of the equipment. In addition the tax treatment grants capital allowances on the expenditure and assuming the equipment is purely for business it is possible to get the annual investment allowance which is rising to £500,000 per annum and now scheduled to finish 31st December 2015. All the contracts are slightly different but they are nevertheless a variation on a theme which is designed to take the UK into a situation where it is producing far more power for its own needs.
If anybody has a proposal put to them by an energy supplier for the production of energy we would be quite happy to review the draft contract and explain the financial and tax implications to them to ensure any contract entered was as beneficial as possible to the business concerned.
By David Addison BA (Hons) FCA
Addison & Co