Financial Benefits & Incentives to Air Conditioning

Technology has allowed modern day air conditioning systems to become very energy efficient. There are many financial and environmental benefits to having air conditioning installed. This has been realised by the government in their quest to reduce carbon emissions and climate change, when they signed the Kyoto protocol in 2006.

Did you know that a heat pump air conditioning system is estimated to save in excess of 2 tonnes of carbon emissions a year? Heat pump inverter driven air conditioning can save thousands of pounds off your fuel bill. It is approximately 30-40% cheaper than gas central heating and 50-60% cheaper than electrical heating. Plus you have the added bonus of cooling as well, offering year round climate control for you and your staff!

The government have set up various incentives such as interest free loans and the Enhanced Capital Gains scheme to encourage businesses to choose air conditioning over conventional forms of heating and cooling.

Domestic installations are also being encouraged with a reduced VAT rate which currently stands at only 5%. Charities, care homes and various other organisations are also included in this incentive scheme.

For more information and a free site survey call Air-control direct on 02380 421515 or email info@air-control.co.uk

Enhanced Capital Allowance

The Enhanced Capital Allowance (ECA) scheme allows a company who has spent on technologies, such as a modern air conditioning system, to be able to claim back 100% of the costs in the first year of tax allowances.

To qualify for this incentive the company must purchase equipment that is currently found on the governments Energy Technology List. Air-control currently has in excess of 200 products listed on the Energy Technology List in the air conditioning heat pump category.

Claiming The Allowances

The ECA’s are claimed in the same way as other capital allowances on the company’s corporation tax return, or the income tax return for partnerships or sole traders.

Provided the equipment purchased is on the current Energy Technology List, neither the product nor the installation need to be provided with documentation to prove its qualification.

All businesses can claim ECA’s on their qualifying expenditure regardless of their size, location or sector of business. ECA’s permit the full cost of the investment to be reclaimed against taxable profit, not just the expenditure on the plant itself.

ECA’s are given on 100% of your expenditure in the first year (including all installation costs). This means you can reduce the profits for the period of the investment on which you pay tax by 100% of the expenditure incurred when buying qualifying capital equipment.

Therefore on air conditioning installations and equipment costs of £10,000, your business will reduce its taxable profit by the full £10,000. That makes the first year saving from the ECA £3000, much greater than the standard capital allowance first year saving of only £750, a figure which goes on decreasing on the remaining balance for later years.

For more information and a free site survey call Air-control direct on 02380 421515 or email info@air-control.co.uk