How green refurb can save cash
COMMERCIAL INTERIORS
BUSINESSES about to fit out or refurbish their office premises could
benefit from accelerated tax relief and improved cash flow under the
Government’s Enhanced Capital Allowances (ECA) Scheme.
According to Morris & Spottiswood, the Glasgow-based fitout, housing and
maintenance specialists however, many local businesses are not aware
that the scheme allows them to write-off 100 per cent of the costs of
energy-saving plant and equipment against taxable profits in the first
year of purchase.
“The ECA scheme is a tax incentive which the Government has introduced
to encourage more organisations to choose greener building technologies
and reduce their carbon footprint,” explains Tony Hampson, Morris &
Spottiswood’s managing director of fitout.
He continues: “To qualify for
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Tony Hampson - energy-efficient refurbishment programmes 'can significantly boost cash flow'
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the ECA scheme for energy-saving technologies, businesses need to buy
plant or machinery which is listed on the Government’s Energy Technology
Product List which the Carbon Trust manages.”
The list specifies 14 designated technologies covering a wide range of
energy-saving systems from boilers, heat pumps and pipe works, to
heating, ventilation and air-conditioning systems. Any organisation that
pays corporation or income tax is eligible for ECA.
“A company spending £200,000 on refurbishing its offices would typically
only be able to write-off 25 per cent of the costs in year one and
receive tax relief on £50,000,” explains Hampson. “By doing the same
refurbishment energy-efficiently, the same company would
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receive tax relief on the full £200,000 in the first year which would
significantly boost cash flow.”
ECA tax relief applies to fixtures and fittings and not the structural
elements of the building. Companies claiming for energy-saving equipment
under the ECA scheme can also claim for the transport and installation
costs. “This also includes the costs of any essential modifications
which are required to fit the equipment.” says Hampson.
He adds: “By investing in energy-saving equipment, companies can also
lower their Climate Change Levy and increase their business appeal to
clients and investors who want to work with environmentally responsible
organisations.
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