Accelerated Capital Allowances
Accelerated Capital Allowances for energy efficient equipment
Section 46 of the Finance Act 2008 provides that companies may claim 100% of the capital cost of certain energy efficient plant and machinery against corporation tax in year of purchase. The purpose of the ACA scheme is to encourage businesses to purchase plant and machinery that is highly energy efficient and thus make significant savings on energy costs and reduce carbon emissions.
Tax incentives are available for a wide range of energy efficient equipment through the Accelerated Capital Allowance (ACA) scheme. The scheme enables companies to claim 100% of the capital cost of certain energy efficient plant and machinery against corporation tax in the year of purchase. The purpose of the ACA scheme is to encourage businesses to purchase plant and machinery that are highly energy efficient and thus make significant savings on energy costs and reduce carbon emissions. The scheme will run for an initial period of three years from 9 October 2008, the date of the first Ministerial Order S.I. 399 of 2008 to establish the list of approved energy-efficient equipment. The scheme was extended in Budget 2010 to October 2014.
Initially, the ACA Scheme covered five product categories - lighting, lighting controls, motors, variable speed drives and building energy management systems. The eligibility criteria and product lists for the product categories were updated by S.I. 76 of 2009 while S.I. 393 of 2009 introduced 24 additional classes of technology. S.I. 549 of 2009 and S.I. 214 of 2010 further updated the eligibility criteria and products lists.
On a regular basis, Statutory Instruments (S.I.) are published with the latest updates of eligibility criteria and ACA eligible products. With the publication of the latest Order, there are now nearly 8,000 products on the ACA Register, covering 52 technologies.
It is estimated that up to 85% of any company's equipment procurement needs can be sourced through the ACA list of highly energy efficient products.
The current S.I. list is as follows:
Click here for full scheme details.