Capital allowance boost for green assets
Chancellor Gordon Brown has announced 100% capital allowances for businesses investing in environmentally friendly technologies in his Budget speech.
‘The government is publishing this month the list of technologies that will qualify for 100% tax credit relief, said Brown, ‘and later this year we will launch a green technology challenge offering this 100% tax relief to companies investing in the next generation of environmental technologies.’
The scheme will allow companies a first year allowances on energy-saving plant and machinery that contain energy-saving technology, within designated areas such as refrigeration equipment, thermal screens and motors. Energy service companies will be able to claim 100% on qualifying plant machinery installed in a client’s business premises, which they provide and operate under an energy management contract. However, the plant and machinery must be used by the company itself, not leased to another.
Companies claiming relief will be able to write off the whole cost against their taxable profits immediately. A list of energy technology investments that qualify for this capital allowances scheme will be published by the government on April 1.