The Enhanced Capital Allowance (ECA) energy scheme aims to encourage businesses to invest in certain energy-saving technologies.The ECA energy scheme lets your business claim 100 per cent first-year tax relief on investments in qualifying technologies and products.
This means you can write off – ie deduct – the whole cost, or up to the published claim value, of buying the energy-saving product against your taxable profits in the year of purchase.ECAs bring forward tax relief, so that you can set it against profits from a period earlier than would otherwise be the case.
See the page in this guide on how to claim an ECA for listed energy saving products.Only new equipment is eligible for an ECA – used or second-hand equipment does not qualify.
Eligible equipment, and the criteria they have to meet, is published in the Energy Technology List.
The criteria are reviewed annually to keep pace with technological progress.Benefits of the ECA energy schemeUsing energy-saving equipment will help reduce your energy bills, saving your business considerable sums of money in the long term.Claiming ECA tax relief will save your business even more money – improving your cashflow for the year that you invest in the new equipment.
And using the equipment itself will help reduce the impact your business has on the environment.