Reduce your energy costs and claim a tax break by choosing products listed on the Energy Technology List (ETL), the government-managed list of energy-efficient products
The ETL is part of the Enhanced Capital Allowance (ECA) tax scheme for businesses, and with approximately 14,000 listed products, it is one of the world’s largest databases of top performing energy-saving products.
Businesses that purchase technologies listed on the ETL are entitled to accelerated tax relief on their taxable profits. If your business purchases a product from the list, you’ll be able to claim 100% first year capital allowance through the ECA if the product is listed on the ETL at the time of purchase. Collectively the ETL and ECA scheme encourage businesses to invest in energy-saving equipment. The ECA scheme will come to a close in April 2020, although it is important to note that the government has no plans to stop the ETL beyond April 2020.
What products are eligible for Enhanced Capital Allowance tax relief?
Products that are eligible for an ECA are:
a) Products listed on the ETL at the time of purchase
b) Products in ‘unlisted’ technology categories that meet the ETL criteria
Worked example of an ECA: Imagine you are planning on buying a new electric motor for your business.
You spend £10,000 on a new electric motor and claim a standard capital allowance at the 18% rate, and pay a 19% corporation tax (other rates exist, please refer to HMRC information on Corporation Tax rates).
Savings: Under this scenario, the tax relief would be £342 in the first year*. Further tax reliefs could be claimed in subsequent years.
*Assuming all available Annual Investment Allowances (AIA) have been taken and standard capital allowances are being claimed, the standard rate is 18% on a reducing balances scale.
You instead decide to invest in a higher efficiency motor listed on the ETL and can therefore claim an ECA.
Savings: Under this scenario, the ECA gives an immediate one-off 100% of the available tax relief of £1,900 that year. In other words, an ECA can provide a cash flow boost of £1,558 for every £10,000 you spend in the year of purchase, with no need to claim further relief in future years.
*As a company you can claim ECAs in addition to AIAs, (for example if you have used up your AIA allowance, then you could claim an ECA on other ETL listed products), thereby increasing total available accelerated tax allowances.
For more information on how you can claim financial benefits and tax relief you can contact HMRC directly by emailing firstname.lastname@example.org
Claiming ECAs for energy saving equipment is easy; your organisation claim ECAs for energy-saving equipment through your income tax self-assessment or your corporation tax self-assessment return, which is the same way that you claim standard capital allowances.* We recommend that purchasers speak to their company´s accountant. Purchasers should check to make sure that the product purchased is eligible for an ECA on the date of purchase. A business or organisation that does not pay income or corporation tax cannot claim an ECA on energy-saving equipment. For more information please visit the Gov.UK Claim Capital Allowances webpage.
* Please note that on 29 October 2018, the Chancellor announced that the ECA and First Year Tax Credits Scheme (FYTC) will end from April 2020. Government has no plans to stop the ETL and manufacturers will be able to continue to list their energy efficient products.
If the product is listed on the ETL at the time of purchase, then evidence of an invoice with the claimed amount is required. Details of the product can be printed from the ETL website, through the ‘email product details’ function below. You will receive an email with the ETL logo mark against the product, with the date of listing on the ETL. This can also be used to support a claim. If the product is not ‘listed’ on the ETL, but comes under the category of an ETL ‘unlisted’ technology, then you will need a Statement of Compliance from the manufacturer against the ETL criteria, along with supporting technical documentation, e.g. a technical datasheet. Please see the White LED lighting units checklist and statement template for a sample template.
Claims should be based on the invoice value of the eligible product. Only the cost of the equipment listed on the ETL can be included in the claim - for example, if a Variable Speed Drive (VSD) is listed on the ETL and is contained within a larger piece of equipment then only the VSD element can be included in the ECA claim. Usually the direct transport and installation costs associated with the purchase and installation of an ECA eligible piece of equipment can also be included in the claim – please check the ”scope of claim” section in the ETL eligibility criteria document relating to your product’s technology category and contact HMRC for any further information. If the invoice value of the eligible equipment cannot be identified (e.g. if the eligible equipment is a component of a larger system you have purchased such as a qualifying motor which sits inside a non-eligible compressor), then the tax relief should instead be based on the claim value. Please check the Claims Values document to see whether claim values are relevant to your technology category.
Please see the information on the claim capital allowances webpage relating to loss making companies. ETL listing dates – when an ECA can/cannot be claimed for products Equipment is only eligible for an ECA from the “added” date shown on the ETL website until any “removed” date. Any purchases made before the “added” date are not eligible for an ECA. If you purchased the product after the removed date then the product is not eligible for an ECA. Products are removed from the ETL for various reasons – for example, when the product no longer meets the eligibility criteria (which may be due to a change in the criteria) or the product is no longer manufactured. In the case of Air Source Split and Multi-Split Heat Pumps (incl. VRF), this technology category became 'unlisted' on 7th August 2014 and any products on the ETL at that stage will show as 'removed'. Purchasers may claim an ECA for a product in this category if it meets the current criteria detailed on the Energy Technology Criteria List and the supplier has provided a supporting statement to that effect.
The ETL can be used to identify energy-efficient products which are eligible for an ECA. In the case of ‘listed’ technologies, products on the list have been reviewed by a team of ETL technical specialists as meeting the ETL criteria. In the case of ‘unlisted’ technologies, where there are so many variations of a type of product, then products are not individually listed - manufacturers need to check their products against the ETL criteria and make a statement of compliance to the purchasers, supported by technical documentation, in order for the purchaser to be able to make a claim for an ECA. Most technologies fall into the ‘listed’ category.
Only the following categories are in ‘unlisted’ categories:
Combined Heat and Power (CHP) is a separate category. To claim an ECA for CHP, businesses must first get a Certificate of Energy Efficiency. Because this additional certificate is needed, no specific products appear on the Energy Technology Product List. For further information on CHP and ECAs, please visit the Combined Heat and Power Quality Assurance Programme page.
New products are added to the list twice a month, on the 1st and the 15th. Products may be removed from the list for different reasons, e.g. if a product is no longer being sold in the UK and the manufacturer wishes to remove this from the list. For those products removed since 1st April 2017, the removal date appears on the list. For those removed before that, a separate downloadable list is available.