'ECA' Tax Concessions

The Enhanced Capital Allowance Scheme

What is an Enhanced Capital Allowance?

The Enhanced Capital Allowance (ECA) Scheme provides upfront tax relief for businesses that invest in energy saving equipment, to qualify for ECA the equipment must be listed on the Energy Technology list.

What are the benefits to my business?

Businesses who invest in energy efficient technologies that qualify for the Enhanced Capital Allowance can claim 100% tax relief for their investment in the first year, delivering a significant cash flow boost and shortening the payback period on the investment.

Technologies qualifying for an ECA are energy efficient, which means significant long-term financial benefits in addition to the enhanced tax relief.

Investing in energy-efficient technologies reduces energy costs, Climate Change Levy payments and climate change impact.

Which energy efficient technologies qualify?
The Technologies Supported Are:

Air-conditioning Heat-pump systems
Refrigeration equipment
Refrigerated display cabinets and compressors
Thermal screens
Lighting
Combined heat and power
Boilers
Pipe insulation
Motors
Variable speed drives
Warn air and radiant heaters
Compressed air equipment
Solar thermal systems

Every piece of equipment qualifying for an ECA appears on the Energy Technology List at
www.eca.gov.uk This list is being expanded continually, so it's well worth checking regularly.
The web site also gives contact details for the manufacturers of the qualifying equipment.

Manufacturers are being encouraged to use the Energy Technology List symbol to help
companies procuring energy efficient products identify qualifying products and technologies.
The ETL symbol signals independently approved energy efficient performance and the
opportunity for end customers to claim ECA.

Who can claim?

Businesses in the charge to income tax or corporation tax, apart from those who are
leasing the assets i.e. the end user, not the supplier or contractor. However, investments
from 17 April 2002 in qualifying energy-saving equipment for leasing,
letting or hire can qualify for an ECA.

How do I claim?

First check the Energy Technology List before investing in any new energy saving technology,
as only products listed here qualify for an ECA. You can find the list at www.eca.gov.uk

You can claim the allowance on the cost of the product, along with any costs directly associated
with the provision of the product, such as installation costs.

Claim your ECA, as part of your normal income/corporation tax return calculations.

Where can I find further information?

You can find out more about ECA's including the Energy Technology List at www.eca.gov.uk

Other useful sites are The Inland Revenue www.inlandrevenue.gov.uk

Enhanced Capital Allowances Fact Sheet, Factsheet 6, 05 August 2002
Can be downloaded from the Action Energy web site www.actionenergy.org.uk

A generic leaflet is available on ECA's from www.eca.gov.uk reference FL 112

The scheme is being developed by the Inland Revenue and The Department for Environment,
Food and Rural Affairs (DEFRA) and managed by the Carbon Trust.