Enhanced capital allowances for water efficient technologies

Introduction

The Enhanced Capital Allowance (ECA) scheme provides a 100 per cent first-year allowance for investments in certain water efficient plant and machinery. It enables businesses to write off 100 per cent of the cost of qualifying plant and machinery against taxable profits in the year of purchase. This can bring significant financial savings and reduce your business' impact on the environment.

The ECA water scheme is managed by the Department for Environment, Food and Rural Affairs (Defra) and HM Revenue and Customs in partnership with Envirowise. The ECA water scheme includes a variety of technologies, such as water efficient taps, toilets, monitoring equipment and industrial cleaning equipment. Eligible products are detailed on the Water Technology List (WTL).

This guide is aimed primarily at businesses that want to buy water efficient products and the manufacturers and suppliers of those products. It is also relevant to organisations that are not eligible to claim ECAs but can use the WTL as a sustainable procurement tool.

The guide outlines how the ECA water scheme works and which technologies are covered. It also explains how manufacturers and suppliers of water efficient products and technologies can apply to have these added to the WTL.

Subjects covered in this guide

• Introduction
• What is the Enhanced Capital Allowance water scheme?
• Technologies covered by the ECA water scheme
• Water reuse systems
• How to claim an ECA for water efficient products
• Apply to get your product eligible for the ECA water scheme
• Testing products in the ECA water scheme
• Here's how we benefited from using environmental tax breaks

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