In general, when a business purchases machinery or equipment, it can claim the cost over 8 years as a capital (wear and tear) allowance. However, where the machinery or equipment is energy efficient, the full cost can be claimed in year 1.
- It applies to companies only.
- The equipment must be on the list of qualifying equipment
- The equipment must belong to the company and must not be leased, let or hired.
- The equipment must be used wholly and exclusively for the trade.
- The equipment must be in use at the end of the period the accelerated capital allowance is claimed.
- The equipment must be new.
- There is a minimum spend for each category of equipment – see below.
In order to claim the accelerated capital allowances, a minimum spend is required, which depends on the type of equipment, as follows:
|Motors and Drives||€1,000|
|Building Energy Management Systems||€5,000|
|Information and Communications Technology (ICT)||€1,000|
|Heating and Electricity Provision||€1,000|
|Process and Heating, Ventilation and Air-conditioning (HVAC) Control Systems||€1,000|
|Electric and Alternative Fuel Vehicles||€1,000|
|Refrigeration and Cooling Systems||€1,000|
|Catering and Hospitality Equipment||€1,000|
How to Apply
Once a company meets all of the criteria, the allowance is claimed on the Corporation Tax return. There is no need to obtain prior approval as long as the conditions are met.
See the Revenue guide for more information.