Tax Reliefs for Further Energy Saving Investments

New technologies are being added to the existing eight classes of energy-saving technologies that can qualify for 100 per cent first-year allowances under the Enhanced Capital Allowances (ECA) scheme.

A new Energy Technology List of qualifying technologies and products was published on 15 July 2002. The new technologies now included are:

- heat pumps for space heating
- radiant and warm air heaters
- solar thermal systems
- compressed air equipment
- refrigeration display cabinets and compressors.

In addition, the existing technology class for boilers has been expanded to include efficient oil-fired condensing boilers.

Businesses that invest in qualifying technologies can not only benefit from the enhanced tax relief, but can also help the environment and reduce their energy needs, fuel bills and climate change levy payments.

An order to give statutory force to the new Energy Technology List will take effect from 5 August 2002. Spending incurred from that date on the new technologies and products can qualify for the enhanced 100 per cent first-year allowances.

The Finance Act 2001 introduced a scheme for 100% first-year allowances for investments in designated energy-saving equipment as part of a package to encourage businesses to reduce their energy needs. The scheme will help the UK move towards its Kyoto and domestic targets for reducing greenhouse gas emissions.

Details of the qualifying technologies and products are available on the Internet at www.eca.gov.uk. Advice can be obtained from the Environment and Energy Helpline (0800 585794).
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