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Any business that pays income tax and corporate tax, and is looking to install heat pump air conditioning, can claim 100% tax relief in the first year on specific energy-saving products and technologies through the Enhanced Capital Allowance (ECA) scheme.

The ECA is a government led initiative, run by the Carbon Trust and the Department for Environment, Food and Rural Affairs. The aim is to help businesses fit more energy efficient equipment and so reduce the UK's carbon dioxide emissions as part of its commitment to the Kyoto Protocol.

Previously, a business could only claim 25% of the capital expenditure on a project in the first year and 25% on the reducing balance in subsequent years - about 95% tax relief is claimed after eight years. By allowing 100% relief in the first year, a business?s cash flow is improved significantly by the reduction in its tax bill.

What technologies qualify?

If your business is thinking of investing in energy-saving plant or machinery then the following technologies are specified in the ETL. The ETL is constantly changing as new products are added and as the energy efficiency threshold is raised, old products are removed.

  • Air-to-air energy recovery.
  • Automatic monitoring and targeting (AMT).
  • Boiler equipment.
  • Combined heat and power (CHP).
  • Compressed air equipment.
  • Heat pumps for space heating.
  • Heating, ventilation and air conditioning (HVAC)
  • zone controls.
  • High speed hand air dryers.
  • Lighting.
  • Pipework insulation.Motors and drives.
  • Radiant and warm air heaters.
  • Refrigeration equipment.
  • Solar thermal systems.
  • Uninterruptible power supplies.

Claims for ECA?s should be submitted in the same way as other capital allowances on the Corporation Tax Return for companies, and the Income Tax Return for self-employed and partnerships. End-users should notify their tax advisor if they have purchased a qualifying system and retain the invoice.

For more information visit http://etl.decc.gov.uk/etl

Trevor Blake provide the latest in Air Conditioning Units to help you achieve tax relief through the ECA scheme. Please contact us to find out more.