Enhanced Capital Allowances (ECAs) are a straightforward way for a business to improve its cash flow through accelerated tax relief. The ECA scheme provides businesses with 100% first year tax relief on their qualifying capital expenditure. The scheme allows businesses to ‘offset’ the whole cost of the equipment against taxable profits within the first year of purchase. This can provide a cash flow boost and an incentive to invest in energy-saving equipment which normally carries a price premium when compared to less efficient alternatives. So if your business pays corporation tax at 28%, every £1,000 spent on qualifying equipment would reduce its tax bill in the year of purchase by £280.
The ECA scheme for energy-saving technologies encourages businesses to invest in energy-saving products specified on the Energy Technology List (ETL) which is managed by the Carbon Trust on behalf of Government. The ETL list does not list individual LED products due to the sheer number of products available on the market. Instead, they have outlined a set of criteria for which LED lighting must comply in order to qualify for ECA.
Despite what some suppliers are claiming, LED ‘retrofit’ lamps and tubes are NOT eligible for ECA support unless the existing luminaire is also replaced. This is because replacement lamps do not qualify as ‘capital expenditure’.
The majority of KYMAN® complete fittings and luminaires have been fully tested and certified for compliance with the ECA criteria. If you have purchased our products and would like further information, please contact us.