Energy consumption was brought into focus for industry when the Climate Change Levy (CCL) was introduced. Essentially, the CCL is an additional tax on energy usage by industry and commerce.
The UK Government tried to soften the blow by introducing Enhanced Capital Allowances for capital investment in certain energy saving technologies.
Enhanced Capital Allowances (ECAs) enable a business to claim 100% first-year capital allowances on their spending on qualifying plant and machinery.
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.
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