Enhanced Capital Allowances

Industry News - 4th October 2017

Enhanced Capital Allowances (ECAs) were introduced in 2001, as a way to encourage the use of energy-saving, carbon free, or low carbon emission plant and machinery.

Enhanced Capital Allowances can be offset against the purchase cost of the plant or machinery, providing they are a qualifying item bought after 1 April 2001 and the plant or machinery is unused and not second-hand. Every item purchased under this scheme either must be listed under HMRC ECA guidelines, or the plant or machinery must meet the energy saving or water conservation rules specified by the Carbon Trust.

Products, machinery and equipment that can count as part of an enhanced capital allowance can also include anything that contributes to a building project’s Building Research Establishment Environmental Assessment Method (BREEAM) ratings and improved Energy Performance Certification rating.

Getting your head around enhanced capital allowances isn’t easy. Whether you want to find out more about capital allowances on buildings or integral features capital allowances, we have the expertise and experience to provide the tax advice necessary to make smart purchases that will reduce your overall tax obligation and capital expenditure.

Expert jargon-free enhanced capital allowances tax advice and accountancy services in Stourport, Worcestershire & the West Midlands. Contact us today for a FREE confidential, no obligation consultation: 01299 488860

Enhanced Capital Allowances

No one wants the headache – and associated cash flow issues – of assuming a new piece of equipment, or machinery, or a vehicle – which includes low carbon emission cars, natural gas refuelling infrastructure and water conservation machinery – is permitted under ECA rules, only to find out it doesn’t qualify. We can assess everything before purchasing, to ensure you will receive 100% of the tax allowance in the year you make the investment. ECA offers a significant tax saving compared to other forms of tax allowances on the same items.

As chartered tax advisers, we are qualified and experienced in the field of tax allowances to give you the best possible advice. If your company is currently making a loss – which is often the case when a new infrastructure or construction project is underway – then you may elect to take a payable tax credit, in place of the 100% qualifying deduction. This credit is only available for limited companies, with a tax credit capped at £250,000 or the total employer’s National Insurance contributions payable during the financial year when the plant equipment or machinery was purchased and installed.

For more information about enhanced capital allowances and qualifying equipment and machinery, we recommend reviewing the government website: http://www.gov.uk/guidance/energy-technology-list

When you are ready to start a project or make a capital investment, we recommend speaking to a qualified chartered tax accountant and adviser to ensure you are making a smart, tax efficient investment and that you can receive the tax credit your business needs.

Perrigo Consultants: jargon-free taxation and accountancy advice for small businesses, with an expertise in enhanced capital allowances (ECAs). Chartered tax advice and accounting services in Stourport, Worcestershire & the West Midlands. Contact us today: 01299 488860 for a FREE confidential, no obligation consultation.

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