Chapter CA23150

Record NumberCA23150
Published date16 April 2016
CAA01/S175A, S180A, S182A, S192A & S195A

Normally a person who installs a fixture on land must have an interest in that land to be able to claim capital allowances on the fixture. This means that an energy service provider could be prevented from obtaining first-year allowances because the plant or machinery becomes a fixture on another person’s land in which they have no interest. Special rules have been introduced to address this issue.

An energy services provider is a business that provides a range of energy management services, including the provision, operation and maintenance of plant or machinery, aimed towards reducing their client’s energy bills. They are contracted by other businesses (clients) to manage their energy usage. This can take a variety of forms, from giving advice on how to reduce energy consumption, negotiating lower supply charges with energy providers, to designing, installing, operating and maintaining facilities on the client’s premises to achieve energy efficiencies or savings.

Often an energy services provider’s activities amount to little more than the provision of energy advice, followed by the supply and maintenance of plant or machinery to achieve energy savings. The machinery or plant is being leased. Expenditure incurred before 17 April 2002 on energy-saving equipment for leasing does not qualify for FYAs. Expenditure incurred on or after 17 April 2002 can qualify for FYAs, provided it would qualify for PMAs under the normal rules. The following paragraphs show the circumstances in which an energy service provider can claim 100% FYAs because its activities amount to more than leasing.

There are special rules that let an energy services provider claim 100% FYA, if the supply of plant or machinery to the client does not simply amount to the leasing of plant or machinery. These are particularly relevant to expenditure incurred before...

To continue reading

Request your trial

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT