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Enhanced
Capital Allowance
For Energy Efficient Air Conditioning / Heat Pump Systems
Advantages to Businesses of Installing
Energy Efficient Equipment
- Corporation
tax bill will be reduced during the year in which the investment
in energy efficient equipment was installed.
- A year
on year saving will be gained on electricity costs.
Tax Benefits of Enhanced Capital Allowance
The two major advantages of installing ETL listed equipment
are;
- Reduced
energy bills
- Complete
installation cost is claimed against corporation tax - 100%
in the first year
The complete
installation cost includes:
- Air
Conditioning and Heat Pump systems
- Installation
pipework
- Electrical
supplies
- Cost
of design
- Craneage
- Commissioning
Climate
Change Levy
The government introduced Climate Change levy [CCL] - a tax
on fuel, electricity and gas - for all commercial users -
in April 2001. The intention of this tax was to reduce energy
use and encourage the use of more efficient practices. As
part of the Kyoto protocol, the UK has agreed to reduce the
emissions of green house gases over the forthcoming years
The CCL
equates approximately to a 10% increase in the price [per
kWh] for gas and electricity for small commercial premises
which is added to the energy bill before VAT.
www.eca.gov.uk/etl/homepage.asp
Enhanced Capital Allowance
To encourage businesses to install and use energy efficient
equipment the Enhanced Capital (tax) Allowance [ECA] was introduced.
To qualify for the tax allowance, installed equipment and
products have to comply with government guidelines and be
listed in the Energy Technology List [ETL].
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