Last chance to claim enhanced capital allowances

There is a special scheme known as the enhanced capital allowances (ECA) scheme for energy-saving technologies. The ECA scheme enables a business to claim accelerated tax relief 100% first year allowances (FYA) on qualifying energy efficient and environmentally beneficial technologies.

The accelerated tax relief is designed to encourage businesses to invest in technologies that are energy saving, reduce water use and improve water quality. The ECA schemes are particularly beneficial for those businesses that have fully used their annual investment allowance. The qualifying Energy Technology List (ETL) and Water Technology List (WTL) is applicable for the current 2019-20 tax year.

However, from 1 April 2020 the availability of FYAs and associated first year tax credits available for products on the ETL and WTL will cease. ECA expenditure incurred on qualifying items up to April 2020 will still be eligible for relief.

For most businesses, the majority of the expenditure they incur on plant and machinery will still be eligible for full relief under the Annual Investment Allowance (AIA). However, this change will affect businesses with eligible spend over the AIA limits after April 2020.



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