Uninterruptible Power Supplies and the ECA
Uninterruptible Power Supplies Limited, a Kohler company (UPSL) has always strived to create the most technologically advanced and environmentally efficient UPS systems on the market. This commitment has now been recognised by the Carbon Trust’s Enhanced Capital Allowance (ECA) scheme.
The inclusion of UPSL’s flagship modular system, the PowerWAVE 9000DPA, represents a significant advantage over the competition by giving buyers the opportunity to own a highly efficient UPS system, without the additional upfront costs compared to less energy efficient UPSs. Both the 9000DPA’s 30kVA and 50kVA modules have been accepted onto the scheme and other UPSL products are expected to join the programme within the next few months.
But what is the Enhanced Capital Allowance scheme and how does it affect you?
The ECA scheme is a straightforward way for a business to improve its cash flow through accelerated tax relief and encourages businesses to invest in energy-saving plant or machinery specified on the Energy Technology List (ETL) which is managed by The Carbon Trust on behalf of Government.
By investing in environmentally conscious capital equipment, the scheme allows participating organisations to write-off the total cost of their UPS investment against taxable profits for that year. This significant saving can provide businesses with a much needed cash flow boost and reduce payback periods. The ETL only specifies products which meet the Carbon Trust’s stringent criteria and the PowerWAVE 9000DPA is one of the first within its category to achieve this standard.
ECA & Uninterruptible Power Supplies Limited: The PowerWAVE 9000DPA
The 30kVA and 50kVA modules of the PowerWAVE 9000DPA are now Carbon Trust ECA listed products. In real terms, this means businesses investing in the 9000DPA can receive 100% of the cost of the UPS against taxable profits; therefore potentially reducing the organisation’s tax bill by 26% of the equipment cost.
In addition, delivery, installation, project management and professional fees associated with the purchase can, in many circumstances, also be included – further reducing the cost of the 9000DPA – which already boasts the greatest critical load availability, total flexibility and the highest levels of energy efficiency in the market.
So if your business pays corporation tax at 26%, every £1,000 spent on qualifying equipment would reduce its tax bill in the year of purchase by £260. In contrast, for every £1,000 spent, the generally available capital allowance for spending on plant and machinery would reduce your business' tax bill in the year of purchase by £56. In other words, an ECA can provide a cash flow boost of £204 for every £1,000 spent in the year of purchase.
Efficient systems can help reduce your operating costs
Investment in efficient UPS equipment has always helped to reduce ongoing operating costs compared to inefficient alternatives. However, by choosing a UPS which has been included on the ETL, organisations receive a double benefit – a reduction of initial capital costs and improved energy efficiency, resulting in lower energy bills and reduced climate change levy payments.
How to make a claim
ECAs are claimed in the business’ income tax or corporation tax return the same way as other capital allowances. The documentation you need to make an ECA claim depends on the type of energy-saving equipment purchased and more information can be found here: http://www.eca.gov.uk/etl/claim/
ECA claims should be submitted as part of your normal return and it is important to retain all documents relating to your ECA claim, including invoices, dated screen prints from the ECA website and anything from the company that installs the equipment.
Fore more information on the ECA and Carbon Trust download the following documents:
The Enhanced Capital Allowance scheme for energy-saving technologies
Uninterruptible power supply - A guide to equipment eligible for Enhanced Capital Allowances