renewable energy solutions
100% tax relief for qualifying capital expenditure on selected energy saving technologies.
The Enhanced Capital Allowance (ECA) scheme is a straightforward way for a business to improve its cash flow through accelerated tax relief. The ECA scheme for energy-saving technologies encourages businesses to invest in energy-saving plant or machinery specified on the Energy Technology List (ETL) which is managed by the Carbon Trust on behalf of Government.
The ECA scheme provides businesses with 100% first year tax relief on their qualifying capital expenditure. The ETL specifies the energy-saving technologies, including ground source heat pumps which are included in the ECA 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.
Business Benefits
ECA's enable a business to claim 100% first-year capital allowances on qualifying plant and machinery. The three schemes for ECA's are:
- Energy-saving plant and machinery
- Low carbon dioxide emission cars and natural gas and hydrogen refueling infrastructure
- Water conservation plant and machinery
Businesses can write off the whole of the capital cost of their investment in these technologies against their taxable profits of the period during which they make the investment. This can deliver a helpful cash flow boost and a shortened payback period.
