You may or may not be aware, but there is some good news for businesses that invest in certain energy saving equipment which includes air conditioning. Besides the obvious benefits of having a new energy efficient heating and cooling system installed, there are tax advantages too in the form of the Enhanced Capital Allowance scheme.
What is the Enhanced Capital Allowance scheme?
As part of the Government’s programme to manage climate change and reduce energy consumption, the Enhanced Capital Allowance scheme currently allows businesses to write off 100% of the capital cost of their investment in qualifying equipment against taxable income in the first year. Basically, the scheme helps businesses strengthen their business case for buying energy efficient equipment through a tax break.
Qualifying equipment
Any air conditioning equipment specified must be on the Energy Technology List (ETL) to qualify, an authoritative source of energy efficient equipment managed by the Carbon Trust. The air conditioning equipment should also be used predominantly for heating which is usually the case in an office or retail environment.
When choosing air conditioning equipment for our customers, we regularly refer to this list. However, more often than not, given its intrinsic energy efficiency, we tend to find that the latest modern air conditioning equipment already qualifies!
Unfortunately, it’s not all good news…
April 2020 deadline
The Chancellor of the Exchequer has announced that the first year tax relief on energy saving equipment will be scrapped from April 2020, so there is only a limited time left to benefit from the ECA scheme. If you are thinking about installing new air conditioning equipment and want to take advantage of the tax break, you’ll need to start planning now.
Here at Advantage, we have been designing, installing, maintaining and repairing air conditioning systems of all types for over 20 years. For all your air conditioning requirements, big or small, we can help. Simply get in touch or call us on 01306 628282.
To find out more about claiming Capital Allowances visit HMRC.