Country:United Kingdom
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
Policy Target:Multi-Sectoral Policy
Agency:Department for Business, Energy and Industrial Strategy

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.

25 Energy Efficiency Recommendations Applied:Appliances and equipment, Market transformation policies, Appliances and equipment, Industry, Industry, High-efficiency industrial equipment and systems, Industry, Complementary policies to support industrial energy efficiency
Related policies:Climate Change Levy

Last modified: Thu, 02 Nov 2017 19:50:49 CET