Enhanced Capital Allowances

Enhanced capital allowances (ECA'S) enable a business to claim 100% first year capital allowances on their spending on qualifying plant and machinery. There are three schemes for ECA's:

• Energy saving plant and machinery
• Low carbon dioxide emission cars and natural gas and hydrogen refuelling infrastructure
• Water conservation plant and machinery

Businesses can write off the whole of the capital cost of their investment in these technologies against their taxable profits of the period during which they make the investment.

Direct transportation and installation costs can be regarded as expenditure on the provision of plant and machinery. These can include, for example, the costs of transport, cranage costs to lift the machinery in place, project management costs, installation, modifications to existing plant and machinery, and commissioning. Costs of alteration to an existing building arising as a direct result of the installation of qualifying plant and machinery may be eligible for ECA.

This can deliver a helpful cash flow boost and a shortened payback period.

Energy saving plant and machinery

• Air to air energy recovery
• Automatic monitoring and targeting
• Boiler equipment
• Combined heat and power
• Compact heat exchangers
• Compressed air equipment
• Heat pumps for space heating
• Heating ventilation and air conditioning zone controls
• Lighting
• Motors and drives
• Pipework insulation
• Refrigeration equipment
• Solar thermal systems
• Warm air and radiant heaters

Water conservation plant and machinery

• Cleaning in place equipment
• Efficient showers
• Efficient taps
• Efficient toilets
• Efficient washing machines
• Flow controllers
• Leak detection equipment
• Meters and monitoring equipment
• Rainwater harvesting equipment
• Small scale slurry and sludge dewatering equipment
• Vehicle wash water reclaim units
• Water efficient industrial cleaning equipment
• Water management equipment for mechanical seals
• Efficient membrane filtration systems

More information on ECA's can be found at www.eca.gov.uk.

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