The Enhanced Capital Allowances (ECAs) is a simple 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 by the Carbon Trust on behalf of the Government.
The ECA 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. The ETL specifies the energy saving technologies that are included in the ECA scheme.
The ETL (or Energy Technology Product List, ETPL) is a government-managed list of energy-efficient plant and machinery, such as boilers, electric motors, and air conditioning and refrigeration systems that qualify for full tax relief. For a product to be on the ETL, it must meet specific energy-saving or energy-efficient criteria. It is part of the Enhanced Capital Allowance (ECA) tax scheme for businesses.
• Air to air energy recovery
• Automatic monitoring and targeting (AMT) equipment
• Boiler equipment
• Combined heat and power (CHP)
• Compressed air equipment
• Heat pumps
• Heating, ventilation and air conditioning (HVAC) equipment
• High speed hand air dryers
• Motors and drives
• Pipework insulation
• Refrigeration equipment
• Solar thermal systems
• Uninterruptible power supplies
• Warm air and radiant heaters
• Waste heat to electricity conversion equipment
For more details about eligible product types and the amount of energy they save, see the technology factsheets about ETL product types.
If you need help making your claim for ECAs, you should contact your tax adviser or call the HMRC Self Assessment Helpline on Tel 0300 200 3310.