Enhanced Capital Allowance Scheme

What is the ECA scheme?

The Enhanced Capital Allowance (ECA) scheme is a key part of the Government’s programme to manage climate change, and is designed to encourage businesses to invest in energy-saving equipment.

The scheme provides a tax incentive to businesses that invest in equipment that meets published energy-saving criteria. With lighting there are so many product variations that it would be impractical to list all of them. Manufacturers/suppliers of equipment in these categories are to advise customers on which of their products are eligible for an ECA. The Dialight range of LED industrial lighting products meet the requirements for ECA eligibility.

Key Features of the ECA scheme

• Open to all businesses that pay UK corporation or income tax, regardless of size, sector or location.
• Provides 100% first-year capital allowances on investments in energy-saving equipment against taxable profits of the period of investment.
• Only spending on new and unused energy-saving equipment can qualify for ECAs.
• Capital allowances are available for spending “on the provision of” plant and machinery. This can include certain costs arising as a direct result of the installation of qualifying plant and machinery such as; transport of the equipment to the site, and some direct installation costs.

How do you claim an ECA?

ECA claims should be submitted as part of your normal corporate or income tax return.

To find out more about funding utilising the Enhanced Capital Allowance Scheme call us on 01780 753316

Also please refer to HM Revenue and Customs (HMRC) and the links below:

• CA20000 - Plant and Machinery Allowance (PMA)
• CA23100 - PMA: First year allowance (FYA)