B3.324 Expenditure on energy-saving plant or machinery—first-year qualifying expenditure
FA 100% first-year allowance is available for expenditure incurred on designated energy-saving technologies and products. This is part of the enhanced capital allowance scheme which also includes allowances on environmentally beneficial plant or machinery (see B3.324D). First-year allowances on energy-saving plant or machinery are repealed with effect for expenditure incurred on or after 6 April 2020 (income tax) and 1 April 2020 (corporation tax)1. See also CA23140.
Provision is made for the qualifying energy-saving technologies and products to be included in lists issued by the relevant government department (now the Department for Business, Energy and Industrial Strategy), although the scheme is managed by the Carbon Trust on BEIS's behalf. The allowances are not available where feed-in tariffs or renewable heat incentive tariffs are paid in respect of electricity or heat generated, or gas or fuel produced (see below). In certain circumstances, the allowances may be converted by companies into a repayable 'first-year tax credit' (see B3.324H).
The scheme initially covered eight categories of qualifying technology, and further categories have since been added, whilst some have been removed.
The current list is outlined below:
(1) air-to-air energy recovery devices
(2) automatic monitoring and targeting equipment