Ireland’s accelerated capital allowances (ACA) scheme is to be extended to sole traders for the first time, allowing them to write off the cost of purchasing certain energy efficiency and renewable energy technologies.
The announcement was made in yesterday’s Budget (11 October), with finance minister Michael Noonan revealing in a financial statement that the decision had been made to extend the funding scheme beyond limited companies.
“This implements the final recommendation of the agri-tax review and will help businesses in the farming and marine sectors to invest in energy efficient equipment and receive the full allowances in the first year. This will help to contribute to the achievement of our climate change targets,” he said.
The scheme allows companies and individuals to write off 100% of the purchase value of certain types of energy efficient equipment against their profit in the year of purchase.
The extension was a key policy ask from the influential Irish Farmers’ Association (IFA) in its 2017 Budget Submission, which claimed access to investment allowances for solar traders would provide “an important contribution” to improving the emission efficiency of production in the agri-food sector.
“IFA believes that the extension of the SEAI accelerated capital allowances scheme to sole traders, as proposed in the Agri-taxation and Marine taxation reviews, would be a progressive move to encourage on-farm investment and improve the overall efficiency of farming enterprises,” the document states.
The ACA scheme covers a wide variety of technologies, ranging from building energy management systems (BEMS) and energy efficient lighting to solar and wind generation technologies and even electric vehicles and associated charging equipment
Many of these require a minimum spend of €1,000, with lighting and BEMS requiring at least €3,000 and €5,000 respectively to qualify.
Energy efficiency has become a key spending topic for the Irish government, with energy minister Alex White calling for a review of capital spending plans earlier this year to free up more investment funds for energy efficiency programmes.
