Frequently asked questions

In this section we’ve collated and answered questions often asked by companies who have invested in energy-saving equipment, or are planning to. We have only included questions where the information isn’t available elsewhere on the site.

Please email ECAQuestions@carbontrust.co.uk if you can’t find the information you want on this page, or elsewhere on the site.

COMPANY INFORMATION

Can I still claim an Enhanced Capital Allowance (ECA) if my company has not made any taxable profits?
From 1^st April 2008 loss-making companies can realise the tax benefit of their investment in ETL qualifying technologies by surrendering losses attributable to ECAs in return for a cash payment from the Government. The amount payable to any company claiming payable ECAs will be expressed as 19% of the loss that is surrendered. So if a company surrenders a loss of £100,000, the Payable ECA it will receive is £19,000, Payable ECAs will, however, be capped. The maximum credit claimable is limited by the total of the company’s PAYE and national insurance payments for the year in which the claim is made or, if greater, £250,000. For further guidance from HMRC click here.

CLAIMS

I have bought an energy-saving boiler for my factory. Can I claim for the boiler plus installation and transport costs?
Yes. As long as the boiler you have bought was on the Energy Technology Product List at the point of purchase you can claim an ECA against the value of the equipment and any direct transport and installation costs. These might include the cost of getting the equipment to the site, and any necessary modifications you need to make to accommodate it.

Please speak to your tax advisor to find out exactly which costs are eligible for an ECA.

I am making a product that doesn’t qualify for an ECA, but contains a component that does. I then plan to sell this product on. Who, if anyone, can claim an ECA on it?
Only end users are entitled to claim an ECA on products that contain an eligible component.

In this case it will be whoever buys the product from you, and uses it for their business. They will be able to claim an ECA on the proportion of the cost relating to the eligible component. This is known as the 'claim value', and should form the basis of their claim. Claim values must be used where they exist.

There are published claim values to indicate how much can be claimed on eligible components in larger pieces of equipment. More information on claim values.

SCHEME - GENERAL INFORMATION

Why aren’t cheap, easy energy-saving measures such as roof insulation on the list?
The ECA energy scheme provides a tax break to help businesses invest in energy-saving equipment that might otherwise be too expensive.

To qualify for the allowance, the equipment must be classified as “plant” or “machinery” under tax law. Unfortunately roof insulation is not.

However, there’s a range of other government schemes specifically designed to promote simple energy-saving measures like this. Roof insulation itself comes under building regulations.

ETL as a public sector procurement tool
The Energy Technology List (ETL) is solely for the purposes of identifying those energy efficient products which are eligible for an enhanced capital allowance. However, it has come to our notice that the ETL is often used as one of the procurement criteria products have to meet in order to demonstrate they are energy efficient. We should like to make clear that the ETL was drawn up specifically to provide prospective purchasers with confirmation that a particular energy efficient product would be eligible for an accelerated tax relief under the terms of the Government’s Enhanced Capital Allowance Scheme. The Enhanced Capital Allowance scheme does not apply to building fabric products because they are outside the scope of the capital allowances definition of plant and machinery. Therefore, whilst the inclusion of a particular product on the ETL signifies that the product is (a) energy efficient; and (b) eligible for enhanced capital allowance relief, the absence of a product from the ETL does not necessarily signify that a given product is not energy efficient.

Some products may be energy efficient but do not fall into the category of those which are eligible for an enhanced capital allowance. To check whether a particular product which is not on the ETL is energy efficient as claimed, interested parties are advised to obtain a copy of an independent accredited test house report on the product in question.

We hope that this statement will clarify the purpose of the Energy Technology List and explain why not all energy efficient products are included. The statement could then be referred to by interested parties.

For information about this and other government initiatives, please go to Department of Energy and Climate Change (DECC), Department of Environment, Food and Rural Affairs (DEFRA) and Department for Business Innovation & Skills (BIS).