Tax
Relief for Energy Efficiency
The scale of the Climate Change Levy is set to be announced in the 2000
budget, but the latest consultation is already concerned with how the
revenue from the levy will be invested. In an attempt to combine carrot
and stick, the proposals seek to reward those businesses that invest in
energy efficiency with the proceeds of what is effectively an energy tax.
Of particular importance in the consultation is feedback as to what criteria
should be used for qualification for Enhanced Capital Allowances (ECAs).
The five categories so far put forward are combined heat and power, boiler
systems, variable speed drives and lighting systems. Under the proposals,
the entire cost of investment in the qualifying categories could be set
against corporation or income tax bills in the year of purchase. Anyone
thinking of installing new energy systems in the near future should await
developments with interest.
The Chancellor's pre-budget report announced that £150m, three times
more than announced in the 1999 budget, would be made available for schemes
to support energy efficiency and use of renewable energy. The consultation
document is available from the DETR and the close date for comments is
4 February 2000.
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