Claiming an Enhanced Capital Allowance (ECA)
An ECA is claimed through a businesses income or corporation tax return in the same way as any other capital allowance.
However there are different types of supporting evidence needed dependent on whether your product is in a non-listed or listed technology area.
Non-listed technology areas
Some technologies categories supported by the ECA Scheme, namely CHP, component based AMT, lighting, and pipework insulation, do not have products listed on the Energy Technology Product List. Products in these technology categories qualify for an ECA when the product meets the relevant eligibility criteria.
Qualifying products are not listed on the Energy Technology Product List because it is impractical to list all possible product variations.
For these areas, it is recommended that you obtain confirmation from your equipment supplier/installer that the equipment you have purchased meets the ECA Scheme eligibility criteria currently in force.
A Combined Heat and Power scheme will be eligible for an ECA if a DECC Certificate of Energy Efficiency has been obtained. For more information on this, please see the Combined Heat and Power eligibility criteria (PDF, 80KB).
Listed technology areas
Products in all other supported technology categories need to be listed on the Energy Technology Product List at the time of purchase in order to be eligible for an ECA.
Claims should be based on the invoice value of the eligible product. Claims may include additional direct costs such as the transportation and installation of equipment, and professional fees, although this should be discussed with your tax advisor or HMRC in advance.
If the invoice value of the eligible equipment cannot be identified (e.g. if the eligible equipment is a component of a larger system you have purchased such as a qualifying motor which sits inside a non-eligible compressor), then the tax relief should instead be based on the claim value. The relevant claim values to use are included alongside the relevant eligibility criteria.
For further information, guidance and advice on what costs qualify for an ECA claim, consult your tax advisor or visit the HMRC website.
You are also strongly advised to confirm that the product you are purchasing is eligible for an ECA before making any purchase.