Changes to the Enhanced Capital Allowances Rules..

As if Capital Allowances isn’t exciting enough, there is actually an “enhanced” version of it!


It relates to the 100% relief of your investment into energy efficient Plant & Machinery Solutions.


Whether its air conditioning, heat exchanges, CHP solutions or Ground source heat pumps, as long those items appear on the DECC (Department of Energy & Climate Change) approved technology list here:-  then its 100% tax relief for you – and no cap!

The Treasury has recently issued Statutory Instruments 2014 No. 1868 for Income Tax & Corporation Tax, and it goes like this:-

The Treasury make the following Order in exercise of the powers conferred by sections 45A(3) and (4) of the Capital Allowances Act 2001(1).

This Order amends the Capital Allowances (Energy-saving Plant and Machinery) Order 2001 (S.I. 2001/2541) (the “Principal Order”). The Principal Order implemented legislation to introduce a scheme for 100% first-year capital allowances to encourage businesses to invest in energy-saving plant or machinery.

Section 45A of the Capital Allowances Act 2001 (c. 2) defines energy saving plant or machinery and provides for the plant or machinery to be specified in an Order made by the Treasury which can refer to any technology list, or product list, issued by the Secretary of State. Accordingly, the Secretary of State for Energy and Climate Change has issued the Energy Technology Criteria List and the Energy Technology Product List. These lists have been revised and replaced by new lists dated 1 July 2014 and issued on 3 July 2014.

Article 3 amends the definitions of the “Energy Technology Criteria List” and the “Energy Technology Product List” to refer to the new lists, which are available on the Department of Energy and Climate Change’s website.

Article 4 amends article 3 of the Principal Order such that in the case of automatic targeting and monitoring systems falling within the technology class “automatic monitoring and targeting equipment” and air source split and multi split (including variable refrigerant flow) heat pumps falling within the technology class “heat pumps”, there is no requirement for such plant and machinery to be specified, or accepted for inclusion, in the Energy Technology Product List in order to qualify for 100% first-year allowances.

Made; 16th July 2014

Laid before the House of Commons; 17th July 2014

Coming into force; 7th August 2014

Contact us at EXACT to discuss how this can potentially influence your investment for a greater ROI through efficient tax savings.


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