Statutory Instruments
2018 No. 268
Income Tax
Corporation Tax
The Capital Allowances (Energy-saving Plant and Machinery) Order 2018
Made
28th February 2018
Laid before the House of Commons
1st March 2018
Coming into force
22nd March 2018
The Treasury, in exercise of the powers conferred by sections 45A(3) and (4), 45B(1), 45C(2)(b) and (3)(b) and 180A(2) of the Capital Allowances Act 2001(1), make the following Order:
Citation and commencement
1. This Order may be cited as the Capital Allowances (Energy-saving Plant and Machinery) Order 2018 and comes into force on 22nd March 2018.
Interpretation
2. In this Order—
“the Act” means the Capital Allowances Act 2001;
“Energy Technology Criteria List” means the list headed “Energy Technology Criteria List February 2018” and issued on behalf of the Secretary of State for Business, Energy and Industrial Strategy on 26 February 2018;
“Energy Technology Product List” means the list headed “Energy Technology Product List February 2018” and issued on behalf of the Secretary of State for Business, Energy and Industrial Strategy on 26 February 2018.
Description of energy-saving plant and machinery
3.—(1) Plant or machinery is energy-saving plant or machinery for the purposes of section 45A of the Act (expenditure on energy-saving plant or machinery) if—
(a)it falls within a technology class specified in the Energy Technology Criteria List,
(b)it meets the energy-saving criteria set out in that List, and
(c)subject to paragraphs (3) to (5), in the case of plant or machinery falling within any of the technology classes specified in paragraph (2), it is of a type that—
(i)is specified in, and has not been removed from, the Energy Technology Product List, or
(ii)has been accepted for inclusion in the Energy Technology Product List.
(2) The technology classes specified for the purposes of paragraph (1)(c) are—
(a)air-to-air energy recovery equipment,
(b)automatic monitoring and targeting equipment,
(c)boiler equipment,
(d)compressed air equipment,
(e)heat pumps,
(f)heating, ventilation and air conditioning equipment,
(g)high speed hand air dryers,
(h)motors and drives,
(i)refrigeration equipment,
(j)radiant and warm air heaters,
(k)solar thermal systems, and
(l)uninterruptible power supplies.
(3) In the case of solar thermal systems, the solar thermal system or the solar collector included in the system must be of a type within paragraph (1)(c)(i) or (ii).
(4) In the case of automatic monitoring and targeting equipment, automatic monitoring and targeting systems need not be of a type within paragraph (1)(c)(i) or (ii).
(5) In the case of heat pumps, air source split and multi split (including variable refrigerant flow) heat pumps need not be of a type within paragraph (1)(c)(i) or (ii).
Certification of energy-saving plant and machinery
4. In the case of plant or machinery falling within the technology class “Combined Heat and Power” specified in the Energy Technology Criteria List, no section 45A allowance may be made unless a relevant certificate of energy efficiency is in force with respect to that plant or machinery(2).
Energy-saving components of plant or machinery
5. Where one or more components of certain plant or machinery (but not all of that plant or machinery)—
(a)meets the conditions set out in article 3(1), and
(b)falls within any of the technology classes specified in sub-paragraphs (a), (c), (d), (f), (h) to (j) and (l) of article 3(2),
the amount specified in respect of each such component for the purposes of section 45C of the Act is the amount specified in the Energy Technology Product List in relation to that component.
Energy services providers
6. The class of plant or machinery specified for the purposes of section 180A(2) of the Act is the technology class “Combined Heat and Power” specified in the Energy Technology Criteria List.
Revocations
7. The following instruments are revoked—
(a)the Capital Allowances (Energy-saving Plant and Machinery) Order 2001(3),
(b)the Capital Allowances (Energy-saving Plant and Machinery) (Amendment) Order 2002(4),
(c)the Capital Allowances (Energy-saving Plant and Machinery) (Amendment) Order 2003(5),
(d)the Capital Allowances (Energy-saving Plant and Machinery) (Amendment) Order 2004(6),
(e)the Capital Allowances (Energy-saving Plant and Machinery) (Amendment) Order 2005(7),
(f)the Capital Allowances (Energy-saving Plant and Machinery) (Amendment) Order 2006(8),
(g)the Capital Allowances (Energy-saving Plant and Machinery) (Amendment) Order 2007(9),
(h)the Capital Allowances (Energy-saving Plant and Machinery) (Amendment) Order 2008(10),
(i)the Capital Allowances (Energy-saving Plant and Machinery) (Amendment) Order 2009(11),
(j)the Capital Allowances (Energy-saving Plant and Machinery) (Amendment) Order 2010(12),
(k)the Capital Allowances (Energy-saving Plant and Machinery) (Amendment) Order 2011(13),
(l)the Capital Allowances (Energy-saving Plant and Machinery) (Amendment) Order 2012(14),
(m)the Capital Allowances (Energy-saving Plant and Machinery) (Amendment) Order 2013(15),
(n)the Capital Allowances (Energy-saving Plant and Machinery) (Amendment) Order 2014(16),
(o)the Capital Allowances (Energy-saving Plant and Machinery) (Amendment) Order 2015(17), and
(p)the Capital Allowances (Energy-saving Plant and Machinery) (Amendment) Order 2016(18).
Andrew Stephenson
Craig Whittaker
Two of the Lords Commissioners for Her Majesty’s Treasury
28th February 2018
EXPLANATORY NOTE
(This note is not part of the Order)
This Order, along with the Capital Allowances Act 2001 (c.2) (“the Act”), implements the 100% first-year allowance scheme which encourages businesses to invest in energy-saving plant and machinery. It revokes and replaces the Capital Allowances (Energy-saving Plant and Machinery) Order 2001 (S.I. 2001/2541) which has been amended annually.
Article 3 of the Order specifies for the purposes of section 45A of the Act (expenditure on energy-saving plant or machinery) plant or machinery falling within the Energy Technology Criteria List February 2018 and the Energy Technology Product List February 2018 issued by the Department for Business, Energy and Industrial Strategy on 26 February 2018 and meeting the energy-saving criteria set out in those Lists.
The Energy Technology Criteria List and the Energy Technology Product List are available on the Department for Business, Energy and Industrial Strategy’s website at https://www.gov.uk/guidance/energy-technology-list. Copies are available from Andrew Gilheany, Andrew.gilheany@beis.gov.uk, BEIS Energy Technology List Team, 1 Victoria St, Westminster, London SW1H 0ET.
Article 4 of the Order provides that no first-year allowance may be made in the case of plant or machinery falling within the technology class “Combined Heat and Power” set out in the Energy Technology Criteria List unless a certificate of energy efficiency is in force with respect to that plant or machinery.
Article 5 of the Order provides that where one or more components of certain plant or machinery (but not all of that plant or machinery) falls within article 3, the amount specified in respect of each such component for the purposes of section 45C of the Act (energy-saving components of plant or machinery) is the amount specified in the Energy Technology Product List in relation to that component.
Article 6 of the Order specifies “Combined Heat and Power” as a class set out in the Energy Technology Criteria List for the purposes of section 180A(2) of the Act (energy services providers).
Article 7 of the Order revokes the Capital Allowances (Energy-saving Plant and Machinery) Order 2001 and all amending instruments.
A Tax Information and Impact Note covering this instrument was published on 22 November 2017 alongside the Autumn Budget 2017 and is available on the website at https://www.gov.uk/government/collections/tax-information-and-impact-notes-tiins. It remains an accurate summary of the impacts that apply to this instrument.
2001 c.2. Sections 45A to 45C were inserted by paragraph 2 of Schedule 17 to the Finance Act 2001 (c. 9). Section 180A was inserted by paragraph 4 of Schedule 18 to the Finance Act 2001.
“Section 45A allowance” and “relevant certificate of energy efficiency” have the meanings given by section 45B of the Act.
S.I. 2001/2541; as amended by the statutory instruments listed in the subsequent footnotes.