The current corporate tax regime disincentivises food businesses from donating their surplus, distorting the food waste hierarchy. Inconsistencies make anaerobic digestion (AD) more financially attractive than donating surplus to charities.26
This is at odds with Defra’s UK Food Waste Hierarchy, which prioritises redistributing surplus food to people, while listing AD under ‘Recycling’ as the fifth of eight options for dealing with waste.
Under enhanced capital allowances schemes (ECAs), businesses can offset 100% of the costs of certain energy-saving technologies, including AD, against their tax bill.27
In contrast, businesses who choose to donate their surplus food must shoulder the costs of harvesting, packaging, storing and transporting it, making this a less appealing option.
The ECAs have the laudable aim of reducing businesses’ environmental impact. But in effect, they create a financial incentive to send food that could be eaten to be incinerated for biofuels instead.
In addition, many AD companies are now paying farmers for their crops, a practice known as ‘negative gate fees’. This means farmers are sometimes selling edible food to AD companies, as well as growing crops specifically for AD.28
This imbalance must be addressed, and a small amendment to the UK Corporation Tax Act could help to achieve this.
Currently, the Act offers businesses that donate money, equipment, or trading stock to charity a small amount of tax relief. However, there are no specific tax deductions or credits for donating food. We propose an amendment to the Act that would reward businesses that choose to donate their surplus food to charities.29
There are international examples to draw on when designing such an amendment, with over two-thirds of countries investigated by the Global Food Donation Policy Atlas at Harvard Law School having policies to this effect.30 For example, in the USA, businesses can offset food donations and follow a clear formula to determine fair market value for the items they donate.31 This means businesses are fairly compensated, while the total amount they can offset is capped to guard against abuses.
The Government should evaluate how such a policy should be implemented for business of differing sizes.
This small amendment would help to level the playing field, ensuring businesses that donate, rather than incinerate, their surplus food are not penalised financially for doing so.

What would it cost?
Work is ongoing to design a scheme that would best fit the UK.
Our preliminary estimations indicate that, if the UK were to adopt a similar policy to the USA, the cost to the Exchequer to redistribute an additional 375,000 tonnes of surplus food would be £55 million. This would be the equivalent of approximately 900 million meals. Our most recent evaluation demonstrates that FareShare generates an average value of over £4,000 per tonne of food redistributed through reduced costs in areas such as health and welfare. If even half of this value were maintained as distribution scaled up, the resulting social return on investment would be over £700 million, approximately £14 for every £1 invested by the Government into this policy.
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References
Cohen, D. (2023) The great food waste scandal: 2.9 m tons of produce being dumped in landfill. The Evening Standard. Available at: https://www.standard.co.uk/ news/uk/food-waste-scandal-food-7bn-meals-dumped- landfill-b1105486.html
HM Revenue & Customs (2016) Enhanced capital allowances schemes for energy saving and environmentally beneficial technologies. Available at: https://www.gov.uk/ government/publications/enhanced-capital-allowances- schemes-for-energy-saving-and-environmentally-beneficial- technologies.
Farmers Weekly (2024). Fareshare Partner With Farmers To Get Surplus Food To Charity. (Forthcoming), ,; Cohen, D. (2023) The great food waste scandal: 2.9 m tons of produce being dumped in landfill. The Evening Standard. Available at: https://www.standard.co.uk/news/uk/food- waste-scandal-food-7bn-meals-dumped-landfill-b1105486. html
The Global Food Donation Policy Atlas (2021) United Kingdom Legal Guide: Food Donation Law and Policy. Available at: https://www.foodbanking.org/wp-content/ uploads/2023/01/UK-Recs-v2.pdf.
The Global Food Donation Policy Atlas (2021) United Kingdom Legal Guide: Food Donation Law and Policy. Available at: https://www.foodbanking.org/wp-content/ uploads/2023/01/UK-Recs-v2.pdf.
Taxnotes.com (2015) Protecting Americans
From Tax Hikes Act of 2015. Available at: https:// www.taxnotes.com/research/federal/legislative- documents/public-laws-and-legislative-history/ protecting-americans-from-tax-hikes-act-of-2015-div-q/ dv4f#hr2029qs113.