Solutions Inspired Ltd

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Enhanced capital allowance

What is The Enhanced Capital Allowance Scheme?

The Enhanced Capital Allowance Scheme has been introduced to enhance the growth of energy-saving technologies in Small, Medium Enterprises (SME) and larger business organisations. An array of these technologies can be installed by our experienced electricians throughout the North East of England.

The Enhanced Capital Allowance (ECA) Scheme encourages businesses to install energy saving equipment listed on the Energy Technology List (ETL). The technologies that fall within this category are managed by the Carbon Trust, some of which can be installed by our electricians.

The ECA Scheme as it is otherwise known works in tandem with the current Energy Saving Legislation, the Carbon Reduction Commitment and the various incentives in place to reduce carbon emissions in the UK including Energy Saving Grants and Carbon Trust Loans.

Improve Your Cash Flow

The ECA scheme, as our advisors will confirm is structured to provide varying types of businesses the opportunity to write off the complete cost any equipment purchases against taxable profits. This should occur in the year of the specific purchase and is a useful boost to a businesses cash flow. Energy Saving equipment can carry a price premium so the ECA scheme is an ideal incentive to encourage energy saving installations. Our advisors can provide more detailed information on the costs and implications for your business.

What Numbers Are We Talking About?

Take the payment of your corporation or income tax as being 28%. For every £1,000 spent on equipment from the Energy Technology List you will reduce your tax bill by £280 in the year the equipment was purchased.

Loss-making companies are also eligible for the Enhanced Capital Allowance Scheme as our local advisor will confirm. They can achieve a tax benefit for their investment in Energy Technology qualifying products. The company should surrender losses attributable to the Enhanced Capital Allowance Scheme so they can receive a cash payment from the Government. Energy Technology Criteria List (ETCL)

Our advisors will confirm that Enhanced Capital Allowances (ECAs) are only applicable for energy-saving products that comply with relevant criteria under their exact technology group. This is detailed on the Energy Technology Criteria List (ETCL).

The current products are reviewed annually, as a response to technological advancements and market developments. The Department of Energy and Climate Change (DECC) will also be involved in the approval process for new technology groups.

Qualifying products on the Energy Technology Criteria List for each technology are updated on a monthly basis for the inclusion of new and modified products. Our advisor will provide advice on the technologies that best meet your requirements. What Qualifies For The ECA Scheme?

The Energy Technology Product List (ETPL) groups that currently qualify for the Enhanced Capital Allowance Scheme include:

  • Air-to-air energy recovery
  • Automatic monitoring and targeting (AMT)
  • Boiler equipment
  • Combined heat and power (CHP)
  • Compact heat exchangers
  • Compressed air equipment
  • Heat pumps for space heating
  • Heating ventilation and air conditioning equipment
  • Lighting
  • Motors and drives
  • Pipework insulation
  • Radiant and Warm Air Heaters
  • Refrigeration equipment
  • Solar thermal systems
  • Uninterruptible Power Supplies (UPS)

There are 15 groups of products with 54 sub-technologies. Solutions Inspired Ltd can install a number of these technologies; see our Energy Saving Electrical Installations.

How to Claim for Enhanced Capital Allowance

Enhanced Capital Allowance claims should be provided in conjunction with the conventional corporate or income tax returns. Our advisor will explain how important it is to retain documentation that relates to the Enhanced Capital Allowance claim. This may include invoices, computer screen shots with a date from the Enhanced Capital Allowance website and documentation from the company that did the installation. HM Revenue and Customs (HMRC) may assess any aspect of the claim, so it is vital you have the appropriate evidence.

What Value Claim Can I get?

We may install a specific item that complies with the Enhanced Capital Allowance energy criteria. You are eligible in this circumstance to claim back the full cost of the product/s and any costs applicable to the installation.

Conversely, if our advisor installs an item that does not qualify, but has integral parts that do comply; you are eligible to claim the costs relating directly to these parts.

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