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Tinkering and Tightening of Green Tax Reliefs

Updated: Jul 5, 2020

The government has now published more details on this year’s changes to the green technologies supported under the Energy Technology List. The statutory instrument consolidates and supersedes previous changes and is the legal mechanism for the changes to become law.  The Order will come into force on 22 March 2018.

If you have a construction project that is due to start this year and have been looking at the accelerated 100% First Year Allowances (FYAs) for energy or water efficient plant or machinery in your design you may need to revisit some of your assumptions if you wish to maintain relief.

As previously advised in our January post, the changes include:

  1. the addition of 3 new sub-technologies for Evaporative Air Coolers, Saturated Steam to Electricity Conversion Equipment and White LED Lighting Modules for Backlit Illuminated Signs

  2. the removal of 2 sub-technologies for Biomass Fired Warm Air Heaters and Localised Rapid Steam Generators

  3. the merging of 2 lighting sub-technologies

The qualifying criteria will also be revised for the following existing categories:-

  1. Air Blast Coolers

  2. Air Source Gas Engine Driven Split and Multi-split (including VRF) Heat Pumps

  3. Automatic Monitoring & Targeting Systems

  4. Burners with Controls

  5. Evaporative Condensers

  6. Hot Water Boilers

  7. Waste Heat to Electricity Conversion Equipment

  8. Uninterruptible Power Supplies

Last month we attended a webinar by the Carbon Trust which explained the rationale for the latest changes and provided more details on the qualifying criteria.

Further details on the latest technology changes and criteria can be found on the Energy Technology List.

It is worth noting that the specified claim values for components of the following qualifying plant or machinery have also been updated:

  1. air-to-air energy recovery equipment,

  2. boiler equipment,

  3. compressed air equipment,

  4. heat pumps,

  5. motors and drives,

  6. uninterruptible power supplies.

Enhanced Capital Allowances allow businesses to claim an accelerated 100% First Year Allowances instead of the normal 18% or 8% writing down allowances available for plant and machinery. If the business pay’s corporation tax relief it maybe entitled to surrender a proportion of the loss created for a tax credit (which from 1 April 2018 will be based on two thirds of the prevailing tax rate until 31 March 2023).

For further details, please do not hesitate to contact us.


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