Enhanced Capital Allowances: initial equality impact assessment
Published 4 November 2019
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This publication is available at https://www.gov.uk/government/publications/enhanced-capital-allowances/enhanced-capital-allowances-initial-equality-impact-assessment
Project objectives
This measure affects businesses purchasing qualifying plant and machinery that use energy efficiently or are environmentally beneficial - as listed on the Energy Technology List (ETL) and Water Technology Lists (WTL),
It updates the lists of energy-efficient and environmentally-beneficial technologies and products that are eligible for first-year allowances (FYA) from 1 April 2019 for companies, and 6 April for 2019 for unincorporated businesses.
Capital allowances will continue to be available for purchases of certain other qualifying plant and machinery.
The measure will also remove the FYA for both energy-efficient and environmentally-beneficial plant and machinery, including the associated first-year tax credit (FYTC), from 1 April 2020 onwards.
The FYA schemes currently allow 100% of the cost of an investment in qualifying plant and machinery to be written off against the taxable income for the period in which the investment is made, improving cash flow for businesses.
The FYTC provides a tax credit for loss-making businesses which invest in qualifying items listed on the technology lists.
These allowances are claimed as part of the customer’s current process. However, from April 2020 some of these allowances will not be available - therefore HMRC is removing some of the boxes on relevant tax returns so customers will no longer be able to claim the allowances.
Customer groups affected
The customer groups that will be impacted by the change are:
- limited companies
- self-employed individuals
- tax agents
- IT/software developers
What customers need to do
As a result of this change, customers need to make themselves familiar with the lists for FYA for both energy-efficient and environmentally-beneficial plant and machinery and ensure they are aware what types of allowances they can and cannot claim from April 2020 onwards.
Assessing the impact
We assessed the equality impacts on all the protected characteristic groups in line with the Equality Act and Public Sector Equality Duty and section 75 of the Northern Ireland Act.
Racial groups
Impact on customers
The Environmental Enhanced Capital Allowance’s population will be made up of diverse racial groups. There is no evidence to suggest any specific impacts on those customers within this protected characteristic group.
Disabled and not disabled
Impact on customers
No evidence, as above.
Gender
Impact on customers
No evidence, as above.
Gender reassignment
Impact on customers
No evidence, as above.
Sexual orientation
Impact on customers
No evidence, as above.
Age
Impact on customers
No evidence, as above.
Religion or belief
Impact on customers
No evidence, as above.
Pregnancy and maternity
Impact on customers
No evidence, as above.
Marriage and civil partnership
Impact on customers
No evidence, as above.
People with dependents and those without
Impact on customers
No evidence, as above.
Political opinion (for Northern Ireland only)
Impact on customers
No evidence, as above.
People who use different languages (Including Welsh language and British Sign Language)
Impact on customers
Yes - the project will consider the Welsh language at every stage of release. All guidance and communications to do with the changes will be readily available on GOV.UK in Welsh as per the existing Welsh language standards.
Employer Bulletins are to be translated into Welsh and include the information and messages for this project.
Online services and guidance are available in Welsh language. For those customers whose first language is not English, alternative arrangements can be made for friends and family to interpret or speak on their behalf when dealing with HMRC.
HMRC is working with groups such as RAD (Royal Association for Deaf people) to co-develop support material for people who do not use English as a first language (eg British Sign Language) to explain how to communicate with HMRC using digital services.
Opportunities to promote equalities
We have considered opportunities to promote equalities and good relations between people in each of the equality groups, but none have been identified within the scope of this project.