The ever-increasing cost of energy continues to be a concern for businesses across the country, not least, County Durham.

Could reducing your ongoing business expenses and freeing capital benefit your business?

This factsheet and our wider Business Energy Efficiency Project aims to provide practical, introductory advice to micro, small and medium sized businesses. Our project aims to demonstrate that investing in energy efficiency can generate financial savings, strengthen your business, and support growth.

Being aware of how your business uses energy and, more importantly, where your business wastes energy will make a difference to your bottom line.

UK Government figures suggest that the average SME could reduce its energy bill by 18-25% by installing energy efficiency measures with an average payback of between one and three years (DECC, 2015).

This factsheet introduces the Enhanced Capital Allowance Scheme (ECA) for Water Efficient Technologies (WET).

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Enhanced Capital Allowance

Scheme for Water Efficient Technologies

www.beep.uk.net

The Enhanced Capital Allowance Scheme (ECA) allows businesses to claim back 100% of the capital cost of purchasing certain products against taxable profits. The addition of water saving technologies to the ECAS means businesses can claim back 100% of the capital cost for purchasing highly efficient water technologies.

By making it possible to claim back the purchase cost of qualifying equipment, the ECAS helps make the initial purchase price of water efficient technologies more cost effective.

The scheme is open to all UK businesses and only applies to the purchase cost of new equipment and only the equipment which features on the Water Technology Products List (WTPL).

What is the Water Technology List

The Water Technology product List (WTL) displays all qualifying technologies that are certified to be efficient and cost effective in the long term.All technologies that appear on the WTL are accompanied by installation guidance which installers must adhere to for you to successfully register your installation under the ECAS.

There is a range of technologies available under the Enhanced Capital Allowance Scheme for Water Efficient Technologies including:

• Toilets

• Showers and taps

• Washing machines

• Flow controllers

• Leak detection equipment

• Meters and monitoring equipment, and

• Water reuse and rainwater harvesting equipment.

The efficient products that feature as part of the WTL qualify through a set of strict criteria known as the Energy Technology Criteria List (ETCL) that is reviewed annually to reflect improvements and innovations in technology.

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www.beep.uk.net

For example, your business needs new toilets; you investigate and find two systems that work for your needs:

System One The system is £5,000 but does not feature as part of the ECA scheme

System Two The system is £6,000 but does feature as part of the ECA scheme

System One £5,000 x20% tax relief x 28% corporation tax = £280. Total Cost = £4,720

System Two £6,000 x 100% tax relief x28% corporation tax = £1,680. Total Cost = £4,442

How do I claim tax back through the ECAS?Claims are made for the ECA through your tax self-assessment or corporation tax self-assessment return. We recommend keeping all documentation, including invoices and receipts. Your accountant will be able to advise you further on important documentation.

If you do not return self-assessment or corporation tax self-assessment forms, then you are unable to claim through ECA.

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Jargon Buster

Enhanced Capital Allowance Scheme (ECA) – the ECA scheme provides businesses with improved tax relief when purchasing energy efficient equipment.

Water Technology product List (WTL) – The Water Technology List consists of 14 categories of water technologies on which the First Year Capital Allowances can be claimed.

Enhanced Capital Allowance Scheme for Water Efficient Technologies – Enhanced capital allowance scheme for water which provides a 100 per cent first year allowance for some water efficient technologies.

The Energy Technology Criteria List (ETCL) – ETCL details the technologies that qualify for the Enhanced Capital Allowance Scheme and the specific eligibility criteria they all must meet.

The Business Energy Efficiency Project (BEEP)

BEEP helps County Durham SMEs generate financial savings through energy efficiency.

Contact the team to find out if we can help your business.

i

Our partners

business energy efficiency project Durham County Council

www.beep.uk.net

03000 265547 beep@durham.gov.uk DCCBEEP

Disclaimer: The information in this document is provided in good faith, and every effort has been made to ensure that it is accurate at the time of publication. However, the Council gives no warranty as to the accuracy or completeness of the information contained in this document, and disclaims any liability for any inaccuracy or omission.

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