Enhanced Tax Relief

Capital Allowances

The Enhanced Capital Allowances (ECA) scheme rewards investment in energy saving systems on the Energy Technology List (ETL) with accelerated tax relief. Businesses may be able to claim 100% first year capital allowances and write off costs against taxable profits in the year of purchase.

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Enhanced Capital Allowances matter…

The ECA Scheme provides businesses with enhanced tax relief for investments in equipment that meets published energy-saving criteria. The full list of products that meet current eligibility criteria and claim values are published Energy Technology Criteria List on the Energy Technology Criteria List. You can visit the Government ECA site here.

100% first year capital allowances
Enhanced Capital Allowances allow a business to reduce taxable profits in the form of capital allowances for investment in plant and machinery. Businesses investing in ETL approved energy saving plant and machinery can claim for 100% first year capital allowances on their investment in the year in which the expenditure is incurred. Essentially ECAs can bring forward relief to set against profits for a period earlier than might otherwise apply and so boosting cash flow. There are various eligibility requirements, for example capital expenditure on plant and machinery must be for  use in a business’s trade and that the machinery or plant belongs to the person making the claim as a result of incurring the expenditure. Some assets will not qualify for ECAs.


Claim your Capital Allowances

Though claims for ECAs are made in the same way as other capital allowances on a Corporation Tax Return (companies) and Income Tax Return (individuals and partnerships), claims must be based on the costs incurred. For Inland Revenue scheme guidance can be found here.

There are various matters to consider in your claim, for example if the qualifying product is or is not not already incorporated into a larger item of plant and machinery. Also what you may claim for,  this may (or may not) include items such as:
  • direct transportation to provision qualifying plant or machinery
  • crainage to lift plant into place
  • project management
  • modifications to existing plant
  • alterations to an existing building as a direct result of installing qualifying plant
  • installation and commissioning
  • directly related professional fees

Clean Air can help

The good news is that Clean Air are ready to help you with your claim at every step of the way. Our project managers will be pleased to use their vast experience to make light of the paperwork.

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