Save money on your corporation tax by installing air conditioning!
What is Enhanced Capital Allowance?
Enhanced Capital Allowances (ECAs) are a straightforward way for a business to improve its cash flow through accelerated tax relief.
The ECA scheme means businesses don’t have to pay tax on 100% of the expenditure incurred. Therefore the business reduces its taxable profit for the first year when the expenditure is made.
The ETL specifies energy-saving technologies, including air conditioning units, are included in the ECA scheme.
How does this translate for my business?
If your business pays corporation or income tax at 20%, every £10,000 spent on qualifying equipment would reduce its tax bill in the year of purchase by £2,000. In contrast, for every £10,000 spent, the generally available capital allowance for spending on plant and machinery would reduce your business’s tax bill in the year of purchase by £360. In other words, an ECA can provide a cash flow boost of £1,640 for every £10,000 it spends in the year of purchase.
Claiming the Allowances
These are claimed in the same way as other capital allowances on the Income Tax Return for partnerships and individuals, and on the Corporation Tax Return for companies. The product and the installation don’t need to be provided with documentation to allow them to qualify, as long as the item is on the Energy Technology Product List.
- Any business of any size, location or type can claim ECA on their qualifying expenditure.
- The full cost of the investment in the technology can be relieved for tax purposes against taxable profits at the time of the purchase.
- The qualifying technologies have to meet the published energy saving criteria.
We also offer a range of air conditioning services including:
- Commercial Reactive callouts. Planned Maintenance. System Design. Variation of brands. Finance available for clients.
- Residential Bespoke installations. Bespoke Design. Varied range. The most sophisticated designers the market has to offer.
- Air conditioning, VRV(F), Chillers, Split, Multi split, Twin systems, cold room, Servicing & PPM Maintenance (and design)
- System Assessment
Find out more on our services page.