Enhanced Capital Allowance (ECA) is an energy scheme which gives tax allowances for energy saving products such as lighting and controls, and could reduce your business’ energy use, carbon footprint and climate change levy payments.
With regards to lighting, if the type used qualifies, as part of the ECA energy scheme, you can claim an allowance back. Lighting including; high-efficiency lighting units, lighting controls and white-light emitting diode units are all included as qualifying products on the Energy Technology List.
The ECA scheme allows businesses to claim up to 100% first-year tax relief on new, qualifying equipment. ECA works by bringing forward tax relief so it can be set against profits from an earlier period.
What this means to you
This scheme has been introduced to encourage businesses to purchase high efficiency, energy saving products to reduce overall maintenance and energy costs.
The benefits of using energy-saving lighting will help reduce your energy usage, whilst reducing energy bills and saving your business money.
You should be able to claim ECAs for the energy saving equipment purchased in the same way you would claim any other FYA (First Year Allowance) on your Self-Assessment Tax Return or Corporation Tax Return. If you need help with making your claim, you should contact your tax advisor or visit the HMRC website.