Energy: Tax Allowances

HM Treasury written question – answered on 7th January 2016.

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Photo of Kevin Brennan Kevin Brennan Shadow Minister (Business, Innovation and Skills)

To ask Mr Chancellor of the Exchequer, if he will bring forward legislative proposals to make business expenditure on resource and energy efficiency measures tax deductible.

Photo of Damian Hinds Damian Hinds The Exchequer Secretary

The government already provides support for businesses who want to invest to become more energy efficient. The annual investment allowance (AIA) lets businesses deduct up to a total of £200,000 of their investment in plant and machinery from annual profits before tax.

In addition, enhanced capital allowances (ECAs) let businesses that invest in certain energy-saving equipment write off the total cost of the equipment against their taxable profit as a 100% first-year capital allowance.

A review into the business energy efficiency tax landscape concluded in November. The government is considering all responses submitted to this consultation and is likely to publish its formal response at Budget 2016.

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