Country:United Kingdom
Year:2001
Policy status:In Force
Date Effective:2001
Policy Type:Economic Instruments>Fiscal/financial incentives>Loans, Economic Instruments>Fiscal/financial incentives, Economic Instruments>Fiscal/financial incentives>Grants and subsidies
Energy Efficiency Policy Targets:Multi-Sectoral Policy
Climate Change Policy Targets:Energy Sector, Energy Efficiency / Demand Reduction, Framework/ Multi-sectoral Policy
Agency:Department for Business, Energy and Industrial Strategy
URL:http://www.eca.gov.uk
Energy Efficiency Description:

Using experience gained in other EU countries, the UK introduced on 1 April 2001 a system of Enhanced Capital Allowances (ECA). While most capital expenditure in the UK can be written off against taxable profits on a reducing-balance basis, investments eligible under ECA will be allowable against taxable profits at 100% in the first year. Businesses can write off the whole of the capital cost of their investment in energy-saving plant and machinery technologies against their taxable profits of the period during which they make the investment. This can deliver a helpful cash flow boost and a shortened payback period. In July 2008 the UK revised the Energy Technology Criteria List, introducing technology categories including: Compressed Air Equipment, Heat Pumps and Lighting. The scheme will now include all necessary equipment for combined heat and power facilities to use solid refuse fuel. Also, those that make a loss during the period in which they invest in energy-saving equipment are now able to surrender their tax losses in return for a cash payment equivalent to 19% of the loss surrendered.

Climate Change Description:

Using experience gained in other EU countries, the UK introduced on 1 April 2001 a system of Enhanced Capital Allowances (ECA). While most capital expenditure in the UK can be written off against taxable profits on a reducing-balance basis, investments eligible under ECA will be allowable against taxable profits at 100% in the first year. Businesses can write off the whole of the capital cost of their investment in these technologies against their taxable profits of the period during which they make the investment. This can deliver a helpful cash flow boost and a shortened payback period. In July 2008 the UK revised the Energy Technology Criteria List, introducing technology categories including: Compressed Air Equipment, Heat Pumps and Lighting. The scheme will now include all necessary equipment for combined heat and power facilities to use solid refuse fuel. Also, those that make a loss during the period in which they invest in energy-saving equipment are now able to surrender their tax losses in return for a cash payment equivalent to 19% of the loss surrendered.

Related policies:Climate Change Levy

Last modified: Wed, 28 Sep 2016 11:18:20 CEST