CA23140 - Plant and Machinery Allowance (PMA): First Year Allowance (FYA): expenditure on energy-saving plant or machinery
CAA01/S45A - S45C and SI2001/2541
Businesses of any size can claim 100% FYAs on capital expenditure on new energy-saving plant or machinery. The normal exclusions CA23113 apply. This FYA will come to an end on 1/6 April 2020. Expenditure must be incurred before 1/6 April 2020 to qualify for the FYA.
Energy-saving plant or machinery is plant or machinery that is included as a qualifying technology or product specified in a Technology List or a Product List. The Secretary of State for the Department of Business, Energy and Industrial Strategy (BEIS) issues these. Detailed guidance on this scheme can be found at ‘Energy Technology List’, gov.uk.
As a general rule, expenditure in respect of plant or machinery that is energy-saving for the purposes of CAA01/S45A does not qualify for FYA if the plant or machinery generates electricity or heat that attracts tariff payments or other incentives under either of the renewable heat incentive or feed-in tariff schemes, see CA23141.
The original Energy Technology List was issued for the launch of the scheme on 1 April 2001. Revised lists have been issued nearly every year since then. The current list was issued on 26 February 2019 and came into effect on 29 March 2019. Details of the lists and the dates they took effect are set out below:
| Issued | effect from |
|---|---|
| 15 July 2002 | 5 August 2002 |
| 11 July 2003 | 5 August 2003 |
| 16 July 2004 | 26 August 2004 |
| 18 July 2005 | 18 July 2005 |
| 2 August 2006 | 7 September 2006 |
| 19 July 2007 | 16 August 2007 |
| 16 July 2008 | 11 August 2008 |
| 6 July 2009 | 4 August 2009 |
| 3 August 2010 | 8 October 2010 |
| 1 September 2011 | 1 October 2011 |
| 5 July 2012 | 2 August 2012 |
| 10 July 2013 | 7 August 2013 |
| 3 July 2014 | 7 August 2014 |
| 2 July 2015 | 4 August 2015 |
| 7 September 2016 | 6 October 2016 |
| 26 February 2018 | 22 March 2018 |
| 26 February 2019 | 29 March 2019 |
The Technology List contains the energy efficiency criteria that must be satisfied. The latest version of the list can be found at ‘Energy Technology Criteria List (ETCL) and claim values’, gov.uk.
The Technology List sometimes requires that:
- design and/or installation of the plant or machinery has been certified as meeting the relevant technology standards by the Secretary of State or the relevant department of the devolved administrations, or
- the plant or machinery is a product specified on the Product List.
Expenditure incurred on a technology that is subject to the issue of a certificate can qualify for 100% FYAs even if it was incurred before the certificate was issued but the claim cannot be made until certification is given. For example, expenditure incurred on 24 May 2018 on a technology whose certificate was not issued until 4 July 2018 qualifies for 100% FYAs but those FYAs may not be claimed until 4 July 2018, the certification date.
Sometimes a manufacturer has to certify that its product satisfies the relevant criteria. These products will be listed in the Product List. A product only gets onto the product list if satisfies the relevant criteria in the Technology List.
Products on the Product List may be incorporated into other items of plant or machinery. In such a case you have to identify the proportion of the expenditure incurred by the purchaser which can qualify for 100% FYA. You do that using tables included as part of the Product List. These specify the deemed expenditure that will qualify for 100% FYA to be attributed to a particular product when it is incorporated into other equipment.
This is the basic rule for allocating the expenditure incurred on the equipment containing the qualifying product (or products). The proportion of the expenditure incurred on the provision of the plant and machinery that qualifies for 100% FYA will be the amount specified in the Product List for the particular product included in that plant or machinery. The balance of the expenditure incurred does not qualify for 100% FYA under these rules but it can still qualify for capital allowances at the normal rate.
If the total expenditure incurred on the equipment containing the qualifying product is less than the amount specified in the Product List for the qualifying product incorporated in that equipment, the total expenditure qualifies for 100% FYA.
Where the expenditure on the equipment is incurred in stages, allocate the expenditure qualifying for 100% FYA evenly between each stage. Do this by comparing the total expenditure to be incurred with the expenditure that will qualify for 100% FYAs. Apply this fraction to each payment to get the part of each payment that qualifies for 100% FYAs.
Example
Bob buys a piece of equipment costing £90,000 that incorporates an item on the product list. The amount on the product list for the part incorporated in the equipment is £18,000. He pays for the equipment in three instalments - one of £40,000 and two of £25,000. The parts of the payments that qualify for 100% FYA are £8,000 = £40,000 x £18,000 / £90,000 and £5,000 = £25,000 x £18,000 / £90,000.
If a certificate is revoked the taxpayer should amend the relevant return to withdraw any 100% FYA claimed.