Guide

Enhanced Capital Allowances for efficient technologies

What is the Enhanced Capital Allowance scheme?

Enhanced Capital Allowance (ECA) schemes aim to encourage businesses to invest in efficient technologies. The scheme lets your business claim 100 per cent first-year allowances, ie tax relief, on investments in certain technologies and products.

The ECA scheme lets your business claim 100 per cent first-year tax relief on investments in qualifying technologies and products. This means you can write off, ie deduct, the whole cost, or up to the published claim value, of buying the energy-saving product against your taxable profits in the year of purchase.

Advantages of the Enhanced Capital Allowance scheme

Claiming ECA tax relief can help your business to reduce investment costs and its environmental impact. This improves your cashflow in the year that you invest in the new equipment and reduces the time it takes to pay back your investment. And using the equipment itself will help reduce the impact your business has on the environment.

Only new plant and machinery are eligible for an ECA; used or second-hand plant and machinery do not qualify.