a. Enhanced Capital Allowances
Provider: Tax relief.
Summary: The ECA scheme provides businesses with 100% first year tax relief on their qualifying capital expenditure on energy efficient plant and equipment, low carbon vehicles, and water saving technologies. The scheme allows businesses to write off the whole cost of the equipment against taxable profits in the year of purchase.
Eligibility Criteria: Businesses paying corporation tax who invest in energy-saving plant or machinery specified on the Energy Technology List (ETL), or low carbon vehicles, and water saving technologies.
Energy-saving plant or machinery: Air-to-air energy recovery / Automatic monitoring and targeting (AMT)/ Boiler equipment / Combined heat and power (CHP) / Compressed air equipment / Compact heat exchangers / Heat pumps for space heating / Heating, ventilation and air conditioning (HVAC) zone controls / Lighting motors and drives / Pipework insulation / Radiant and warm air heaters / Refrigeration equipment /Solar thermal systems.
It is possible to claim for equipment, transportation of the equipment to the site and for direct installation costs.
Water saving technologies: e.g. water-efficient showers and taps, and vehicle-wash water reclaim units
More information: Capital allowances and ECAs are claimed in a business’s tax return. Talk to your business’s accountant at an early stage to let them know that your business has incurred qualifying expenditure. The accountant can let you know what records they need you to provide so that they can complete your business’s tax return. Visit DECC’s website for more information, and the Energy Technology List.