Enhanced Capital Allowances for LED Lighting enables your Business to upgrade its lighting. Tax-free Enhanced Capital Allowances (ECAs) are a straightforward way for a business to improve its cash flow through accelerated tax relief. The scheme encourages businesses to invest in energy-saving equipment specified in the Energy Technology List (ETL) to help reduce carbon emissions, which contribute to climate change.
LED lighting qualifies for funding however, it is not specifically itemised on the ETL – because of the fast-moving nature of the technology. The technology categories of White Light Emitting Diode Lighting Units and High-Efficiency Lighting Units are covered by the ETL, but eligible products are not listed.
Customers can obtain a statement from QVIS, that states that the product supplied for your project, meets the eligibility criteria in force at the time of purchase. This can then form the basis of the supporting evidence for the tax claim.
An ECA is claimed through a company's income or corporation tax return in the same way as any other capital allowance. HMRC is responsible for the tax-related aspects of the ECA scheme. Buying energy efficient equipment results in a lower overall spend on energy, improving cash flow and lowering overheads. This can be a very attractive proposition as energy use is often the second highest cost after staff salaries, and for some energy intensive industries, it can be the highest operational cost.
Unnecessarily high energy use does not just cost money, it also results in excessive carbon emissions that can further add to business tax costs such as the CRC Energy Efficiency Scheme or the Climate Change Levy. This strengthens the business case for purchasing new energy efficient equipment. Talk to us if you want advice on the ECA scheme and we will provide the support you need to make your application.