Air Conditioning
Enhanced Capital Allowances
The Carbon Trust manages the energy technology list and promotes the enhanced capital allowances scheme on behalf of the government.
The Carbon Trust is a private company set up by the government in response to the threat of climate change, to accelerate the move to a low carbon economy. The Carbon Trust is funded by the Department of Environment, Food and Rural Affairs, the Department of Trade and Industry, the Scottish Executive, the Welsh Assembly Government and Invest Northern Ireland.
Boost Your Cash Flow
Enhanced Capital Allowances (ECAs) are a straightforward way for a business to improve its cash flow through accelerated tax relief. The ECA scheme for energy- saving technologies encourages business to invest in energy-saving plant or machinery specified on the energy technology list (ETL). The ECA Scheme provides business with 100% first year tax relief on their qualifying capital expenditure. The ETL specifies the energy-saving technologies that are included in the ETA scheme. The scheme allows businesses to write off the whole cost of the equipment against taxable profits in the year of purchase. This can provide a cash flow boost and an incentive to invest in energy-saving equipment which normally carries a price premium when compared to less efficient alternatives.
Improve Your Bottom Line
Businesses are often tempted to opt for lowest cost equipment; however, such immediate cost savings can prove to be false economy. Considering the life cycle cost before investing in the equipment can help enhance the cash flow benefits still further. Investing in energy-saving equipment can reduce running costs through increased efficiency, lower energy bills and reduced climate change levy payments, which in turn helps reduce pay-back periods. So the next time you’re thinking about a capital investment in plant or machinery think life cycle cost not lowest cost.
For more information visit www.eca.gov.uk/energy
