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Energy Minister Eamon Ryan has announced the extension of
the Accelerated Capital Allowance (ACA) Scheme.
The Scheme,
detailed in the Finance Bill, allows companies to buy energy
efficient equipment and write-off its full cost against corporation
tax in the year of purchase.
Introduced in 2008, the Scheme has been expanded this year
to include up to forty different technologies. All Irish business
- large and small - can receive tax relief on equipment such
as -
- Refrigeration and cooling systems
- Catering and hospitality equipment
- Electro-mechanical systems
- IT software and hardware
- Lighting - and
- Electric vehicles.
Other categories of equipment - such as certain wind turbines
and solar photovoltaic technology - are also eligible.
“Despite recent reductions in prices,” said Minister Ryan”
energy remains a significant element of business overheads.
Every day, companies are asking how they can be more efficient
in the way they use and manage their energy.
"With this level of interest and dedication on the part
of businesspeople, it is right that we assist them in making
the switch.”
The range of eligible equipment has been extended to apply
to a greater and more varied number of businesses in Ireland.
Now, those in the hospitality, manufacturing and retail sectors
can avail of relief.
“The aim of this Scheme is to help Irish businesses of all
sizes - not only to reduce their energy use, but, crucially,
to save money. It’s working well and I encourage all businesses
to get involved,” said the Minister.
Research has shown that less expensive models of equipment,
while cheaper in the short-term, can consume larger amounts
of energy at a higher cost. Purchasing energy efficient equipment,
with the assistance of the Scheme, is the sensible option
for business - reducing energy bills in the long term.
The Scheme of Accelerated Capital Allowances for Energy
Efficient Equipment was introduced in Budget 2008 (section
46 of the Finance Act 2008) and expanded in Budget 2009 (section
37 of the Finance No. 2 Act 2008). Companies which purchase
specific energy efficient equipment are able to claim their
full cost against corporation tax in the year of purchase
(100% capital allowance), instead of the usual 12.5% per year
over 8 years for plant and machinery.
Three new categories of technology were added to the ACA
scheme in Budget 2010 - Refrigeration and Cooling Systems,
Electro-mechanical Systems and Catering and Hospitality Equipment.
The Refrigeration category will be highly relevant to the
food retail industry - such as supermarkets - who may wish
to replace or upgrade refrigeration cabinets, chiller units,
etc.
The Electro-mechanical category will be relevant to the manufacturing
sector, who may wish to replace outmoded hydraulic or compressed
air equipment - and the Catering and Hospitality category
will be very relevant to the hotel and restaurant trades and
includes equipment such as commercial ovens, dryers, dishwashers,
etc.
In addition to the new categories, the existing Information
and Communications Technology category has been amended to
now include software designed to achieve very high levels
of energy efficiency. This will include virtualisation software
that allows a business to greatly reduce the number of servers
required and related cooling equipment, thus saving greatly
on energy and hardware costs.
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