Accelerated Capital Allowance (ACA): Who Qualifies and What You Get
Learn how businesses can claim a full tax deduction in the first year for investing in energy-efficient equipment.
The Accelerated Capital Allowance (ACA) is a tax incentive that allows businesses to claim a tax deduction for the full cost of energy-efficient equipment in the very first year they purchase it.
Who it's for
This scheme is designed for businesses that are investing in equipment designed to improve energy efficiency.
What you get
Instead of spreading the cost of an investment over several years, you can claim the total cost of the equipment as a tax deduction in the first year. This provides an immediate benefit to your business cash flow by reducing your taxable income right away.
What it costs you
To qualify, the equipment you purchase must be included on an official list of approved products maintained by the energy authority. You must also ensure the items meet the specific energy-efficiency standards required for this deduction.
The catch to know
The equipment you are purchasing must be completely new and unused. You cannot claim this allowance on second-hand or refurbished machinery.
How to apply
- Check the official list of approved energy-efficient products to ensure your equipment qualifies.
- Purchase the new equipment for your business.
- Keep all receipts and documentation regarding the purchase and the efficiency ratings.
- Claim the deduction through your business tax filings.