Cash Back & Grants, The Future of Central Heating
If you have an old boiler and are looking to replace it or if you are a developer that builds new-builds, the wrong decision could cost you more money than you think.
Introduction of 0% VAT for the Installation of Domestic Air Conditioning & Heat Pumps
There is now 0% VAT on the installation of Air Conditioning and Heat Pumps so if you have been thinking about it for a while, there has never been a better time to get the job done.
This reduction replaces the previously reduced rate of 5% and the previous “social conditions” and “60% test” requirements no longer apply.
This is great news. It will enable more homeowners to install energy-saving solutions as part of the Government’s wider initiatives to improve energy efficiency and reduce carbon emissions in homes across the country.
Financial Benefits for installing air source heat pumps
Heat Pumps are classed as renewable technology, and as such some heat pumps allow opportunities for grant and tax benefits to be claimed.
For Domestic Customers
Households are responsible for 25% of all carbon emissions. As part of ongoing efforts to reduce these harmful emissions, the Government has reduced VAT on air source heat pumps for domestic users to 0% on equipment and installation.
For Commercial Customers
The ECA Scheme
Highly energy efficient heat pumps which qualify for listing on the Energy Technology List (ETL) are eligible for the Government’s Enhanced Capital Allowance (ECA) scheme. The Enhanced Capital Allowance (ECA) scheme is designed to encourage businesses to reduce the amount of carbon they release into the atmosphere.
The Energy Technology List (ETL) is a definitive list of all the products that qualify for the ECA. The list covers approximately the top 20% of air conditioning systems, and is updated regularly to ensure that it includes the most energy efficient products currently available.
The ECA scheme provides an incentive for businesses to invest in energy-saving plant and machinery on the ETL list, by allowing businesses an enhanced tax advantage of 100% of the investment in energy saving technology to be written off against the taxable profits in the first year.
The ECA scheme is open to all UK businesses that pay Corporation Tax or Income Tax, providing they have used equipment on the ETL that is new and unused. Some other cost may also be offset. For investments outside of the ECA scheme, the standard capital allowance rate per year is a maximum of 25% on the reducing balance.
For further information, visit www.eca.gov.uk/etl/criteria for the Energy Technology List, and the ECA scheme.
Business Loans through the Carbon Trust
Businesses can now apply for interest free loans from the Carbon Trust ranging from £3,000 to £100,000 towards the cost of introducing low carbon technologies. As the loans are interest free, it is anticipated that savings made in energy consumption will offset the loan repayments. This means that the new technology should pay for itself and your company will make additional savings.
The loans are administered by the Carbon Trust and companies can borrow between £3,000 and £100,000.
These unsecured loans are government funded and can be repaid over a four year period.
They are available to any private sector business that has been trading for at least 12 months and in England, Wales and Scotland any small or medium enterprise can apply, as can larger businesses that do not qualify for the Carbon Reduction Commitment Energy Efficiency Scheme. In Northern Ireland any business can apply.
In order to be eligible for these loans, the technology introduced must save a minimum of two tonnes of CO2 per £1,000 of loan value, with a minimum loan value of £3,000.
For further information visit www.carbontrust.com
