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ECAs mean nothing to 92% of UK businesses

25 September, 2008

More than 90% of UK businesses are unaware of the Government’s ECA (Enhanced Capital Allowances) scheme to encourage investment in energy-efficient technologies, a survey has revealed.

The survey of 1,300 businesses, including offices, retailers and leisure operators, showed that 92% of the companies were unaware of the ECA scheme. Daikin, the air-conditioning supplier which commissioned the poll, warns that this lack of awareness could be hindering the adoption of technologies that can save energy and cut costs.

"In the face of rising energy costs and the need to reduce carbon emissions, businesses are being forced to become more energy efficient," says Daikin’s marketing manager, Mark Dyer. "It was certainly staggering to see that such a large percentage of businesses are still not aware of the financial support that is available through the ECA scheme."

Of those surveyed, 69% thought their companies could be doing more to save energy and cut their bills. However, 61% cited cost as being a barrier to investing in new technology.

"There needs to be far greater awareness of the ECA if we’re to encourage the uptake of new energy-efficient technology," Dyer comments. "In the current financial climate, some businesses may feel it is difficult to justify investment in new energy-efficient technology. However, the tax relief available through the ECA and the whole-life cost savings that this technology will generate, means that the investment can be very cost-effective."

The Government set up the ECA scheme in 2001 to encourage investment in energy-efficient technologies, including variable speed drives and high-efficiency motors. It provides businesses with 100% first-year tax relief on their capital expenditure on qualifying equipment. For example, if a business pays corporation tax at 28%, then every £1,000 it spends on qualifying technology will cut its tax bill by £280.

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