Enhanced Capital Allowance (ECA)
The Enhanced Capital Allowance (ECA) water scheme encourages businesses to invest in technologies that save water and improve water quality. The scheme enables your business to claim 100% first-year allowances, i.e. tax relief, on investments in certain technologies and products
Claiming an ECA means that you can write off (deduct) the whole cost* of purchasing a qualifying water-efficient technology against your taxable profits in the year you made the purchase.
Why am I being offered money back?
The ECA scheme is a key part of the Government’s programme to manage climate change, and is designed to encourage businesses to invest in energy-saving equipment. Using resources (like water, energy and natural materials) more efficiently will bring direct benefits to UK businesses.
Who runs the scheme?
The ECA water scheme is managed by the Department for Environment, Food and Rural Affairs (Defra) and HM Revenue and Customs in partnership with Envirowise.
What is covered by the ECA?
The ECA water scheme includes a variety of water efficient technologies - such as taps, toilets, monitoring equipment and industrial cleaning equipment. Kärcher scrubber-driers qualify under the Industrial Cleaning Equipment category.
Which machines are covered?
Defra annually reviews the lists of eligible water technologies and products, known as the Water Technology List (WTL). At present all Kärcher walk-behind, step-on and ride-on scrubber driers over 40 litres capacity are included, as well as certain smaller machines.
Why should I use a machine on the WTL?
Claiming ECAs for buying water efficient equipment will enable your business to reduce investment costs and its environmental impact. Benefits include the first year tax relief. This will reduce the time it takes to pay back your investment. Your water bills will also be reduced long-term by installing water-saving equipment.
Organisations which are not eligible for tax relief (including capital allowances) - such as local authorities, schools and non-profit organisations - can still use the WTL as a source of information on equipment that may save water and reduce water costs.
How do I claim an ECA for water efficient products?
Click on the image below to watch our video guide to claiming your tax relief
- Buy your Kärcher scrubber drier(s) from the Water Technology List
- Claim your ECA in the same way that you claim other types of first-year allowance - through your income tax self assessment or your corporation tax return.
For more information on claiming first-year allowances visit: hmrc.co.uk
If you need help making your claim for ECAs, you should contact your tax adviser or call the HMRC Self Assessment Helpline on 0845 900 0444.
What if my product isn’t on the Water Technology List?
In order to be eligible for the ECA, the product must be on the WTL at the time that you buy it - you cannot claim an ECA on a product that is added to the WTL after you purchased it. New products are added to the WTL on the first day of every month. The criteria for the WTL may be reviewed annually and can include the introduction of new technologies.
Can I apply for a used or hire machine?
No, only new plant and machinery are eligible for an ECA - used or second-hand plant and machinery do not qualify. Hire Purchase assets are generally treated as belonging to the person using them, even though legal ownership may not pass until a final payment is made at the end of the contract term. However please consult your tax advisor for guidance.
For further help and information:
WTL Advice Line: 0844 875 5885
HMRC Self Assessment Helpline: 0845 900 0444
Kärcher: 01295 752 000
*Dependent on individual tax position. Consult your tax advisor for more information.
