Auditel Consultant:
Peter Harrison

Budget notes – changes to Enhanced Capital Allowances

06 Apr 2010 | Filed under: Utilities

Is your business making the most of the Enhanced Capital Allowance schemes?

The Energy Saving and Water Efficient (environmentally beneficial) Enhanced Capital Allowance (ECA) schemes allow businesses investing in designated technologies that reduce energy consumption, save water or improve water quality to write off 100% of the cost against taxable profits of the period during which the investment was made.

With effect on and after a date to be appointed by Treasury Order to be made prior to the summer 2010 Parliamentary recess, the energy efficient scheme List will be revised to include two new sub-technologies:-

1. Permanent magnet synchronous motors

2. Biomass fired warm air heaters

One existing technology (Compact heat exchangers) and one sub-technology (Liquid pressure amplification) will be removed. The criteria for taps and showers in the Water Efficient scheme will be tightened. Minor housekeeping changes will also be made to the existing criteria of both schemes.

The lists are available on the internet at www.eca.gov.uk

Capital allowances: zero-emission vehicles

Expenditure incurred on a new (and not second hand) zero-emission goods vehicle will qualify for a new 100% FYA if:-

1. The vehicle cannot under any circumstances produce CO2 emissions when driven

2. It is of a design primarily suited to the conveyance of goods or burden

3. The expenditure is incurred on or after 01/04/10 (corporation tax) or 06/04/10 (income tax) and within five years of those dates

Source: Mercia Group via Tearle & Carver Chartered Accountants