Energy Minister Eamon Ryan today announced the extension of the Accelerated Capital Allowance Scheme. The Scheme, detailed in the Finance Bill, allows companies to buy energy efficient equipment and write off its full cost against corporation tax in the year of purchase.
Introduced in 2008, the Scheme has been expanded this year to include up to forty different technologies. All Irish business, large and small, can receive tax relief on equipment such as:
- Refrigeration and cooling systems
- Catering and hospitality equipment
- Electro-mechanical systems
- IT software and hardware
- Lighting
- Electric vehicles
Other categories of equipment such as certain wind turbines and solar photovoltaic technology are also eligible.
“Despite recent reductions in prices,” said Minister Ryan,” energy remains a significant element of business overheads. Every day, companies are asking how they can be more efficient in the way they use and manage their energy.
With this level of interest and dedication on the part of businesspeople, it is right that we assist them in making the switch.”
The range of eligible equipment has been extended to apply to a greater and more varied number of businesses in Ireland. Now those in the hospitality, manufacturing and retail sectors can avail of relief.
“The aim of this Scheme is to help Irish businesses of all sizes, not only to reduce their energy use, but crucially to save money. It’s working well and I encourage all businesses to get involved”, said the Minister.
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Note for Editors:
Research has shown that less expensive models of equipment, while cheaper in the short-term, can consume larger amounts of energy at a higher cost. Purchasing energy efficient equipment, with the assistance of the Scheme is the sensible option for business, reducing energy bills in the long term.
The scheme of Accelerated Capital Allowances for Energy Efficient Equipment was introduced in Budget 2008 (section 46 of the Finance Act 2008) and expanded in Budget 2009 (section 37 of the Finance No. 2 Act 2008). Companies which purchase specific energy efficient equipment are able to claim their full cost against corporation tax in the year of purchase (100% capital allowance) instead of the usual 12½% per year over 8 years for plant and machinery.
Three new categories of technology were added to the ACA scheme in Budget 2010. These are Refrigeration and Cooling Systems, Electro-mechanical Systems and Catering and Hospitality Equipment. The Refrigeration category will be highly relevant to the food retail industry, such as supermarkets, who may wish to replace or upgrade refrigeration cabinets, chiller units etc. The Electro-mechanical category will be relevant to the manufacturing sector, who may wish to replace out-moded hydraulic or compressed air equipment. The Catering and Hospitality category will be very relevant to the hotel and restaurant trades and includes equipment such as commercial ovens, dryers, dishwashers etc.
In addition to the new categories, the existing Information and Communications Technology category has been amended to now include software designed to achieve very high levels of energy efficiency. This will include virtualisation software that allows a business to greatly reduce the number of servers required and related cooling equipment, thus saving greatly on energy and hardware costs.