Enhanced Capital Allowance

WHAT is the ECA?
It’s explained on the Department of Energy and Climate Change (DECC) website
The Enhanced Capital AllowanceThe Enhanced Capital Allowance (ECA) scheme enables businesses to claim a 100% first year capital allowance on investments in certain energy-saving equipment, listed on the Energy Technology List (ETL), against the taxable profits of the period of investment.
That compares to the general rate of capital allowances of 18% a year on a reducing balance basis. Some technologies are included in a special capital allowances pool where the general rate of capital allowances is 8%.
The site gives an example of a business installing a new electric motor under standard capital allowances where the business would see tax relief in the first year of £41.40 with the opportunity to claim further relief in subsequent years.
By investing in a more efficient motor listed on the ETL it could claim an Enhanced Capital Allowance, giving a one-off 100% tax relief of £230 and could also see lower running costs.