Capital Allowances allow a business to gain relief from Corporation Tax on money spent on capital equipment purchases such as vehicles. The relief is received by allowing the company to reduce its taxable income by an amount equal to the pre-tax value of the asset. The company therefore “writes down” the asset against profits. They normally must do this over an 8 year period so 1/8th or 12.5% of the capital value of the asset is written down each year until 100% write down has been achieved at the end of year 8.
The total value of the relief to the business is therefore equal to 12.5% of the pre-tax value of the asset. Under normal Capital Allowances, this total benefit accrues over an 8 year period so. 1/8th of the relief is received each year.
Under the Department of Finance’s Accelerated Capital Allowance (ACA) scheme, 100% asset write down is permitted in year 1 allowing the full value of the tax relief benefit to be received in year 1 thus helping to stimulate a greater cash flow for the business. ACA is intended to stimulate businesses to buy more energy efficient products which include Electric Vehicles and their associated charging infrastructure. The ACA Scheme will be available until the end of 2017. The general qualification criteria for products can be found at the following website:
The ACA list is now incorporated into the Triple-E Register which is operated by SEAI. All EVs eligible for grants under the EV Grant Scheme will also be eligible for ACA. SEAI will automatically register EVs qualifying for the EV Grant Scheme with the ACA/Triple-E Register.
For more information and to view registered products please go to: