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Accelerated Capital Allowances

In a positive sign that improvements in the economy are having a decisive impact on activity in Irish companies, many are now increasing capital spending on equipment. It’s critical that this capital expenditure is spent prudently, and delivers real value to the business. A cost-effective way to do this, which is not being availed of fully by many Irish companies, is to invest in energy-efficient equipment, and so benefit from the accelerated capital allowances that are potentially available. Not only will this help increase the sustainability of the business, which is becoming increasingly important to customers, stakeholders and employees alike, but it will also result in cost efficiencies. At a time when many companies are striving to reduce both their consumption costs and their carbon footprint, this is an area that has particular relevance to anyone with responsibility for procuring energy efficient equipment, including LED Lighting.1 RAYAL, as an Energy Savings and Management Company, can assist through an end to end service that identifies, proposes, designs and installs energy saving equipment for businesses, on a self-financing pay-as-you-save basis. Energy Management is simply the application of the general principles of management to controlling energy use and costs. The first step is to understand and monitor usage, then to identify saving opportunities and progressively reduce usage and costs. The Accelerated Capital Allowance (ACA) is a tax incentive to encourage companies to invest in energy efficient equipment. It allows companies to deduct the full cost of such equipment from their taxable profits in the same year of purchase. This is significantly more attractive than regular “wear and tear” capital allowance. These tax incentives are available for a wide range of energy efficient equipment and lighting through the (ACA) scheme.

The scheme enables companies to claim 100% of the capital cost of certain energy efficient plant and machinery (including Lighting) against corporation tax in the year of purchase. The Accelerated Capital Allowance (ACA) is only applicable to energy efficient equipment on the Triple E Product Register. Organisations who invest in eligible energy efficient capital equipment can deduct the full cost of the equipment from their profits in the year of purchase. 1 (See for a copy of the Tax and Duty Manual, which includes specific reference to lighting: “Lighting equipment and systems designed to achieve high levels of energy efficiency and that meet specified efficiency criteria.”)

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