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Tax Incentives for External Shading
Category: All,Latest News,Regulations
By: Daniel James

External solar shading systems are now more tax-efficient!

 

From this month, expenditure on such systems qualifies for a 50% tax deduction in the first year.  This is because the cost of this equipment counts as ‘Special Rate Allowance Expenditure’ along with additions to HVAC, electrical and lighting systems etc.  Assets in this category have hitherto only been allowed annual writing-down allowances of 6% per annum, so a 50% first year allowance is a big improvement.

As always, however, there is a snag…

There is already an Annual Investment Allowance of 100% for additions to fixed assets costing up to £1 million a year, so the new concession will only be of use to companies (or groups) that are spending that much or more already.  But if your capex is less than this, you will get the 100% first year relief. 

There’s no guarantee that this will continue to be available in future years, so now is the time to consider an investment in external shading.  As an example, £50,000 spent this year will result in a tax saving of £4,750 (being £25,000 @ 19%), whereas the previous saving would have been just £570 (£3,000 [6%] @ 19%).

The benefits of external shading are manifold

  • The systems are very effective at controlling solar heat gain and glare. Incoming solar radiation is stopped before it enters the building through the glazing.
  • Energy consumption on air conditioning and heating is reduced.
  • There is less heat loss from the building in cold weather.

Waverley are experienced, knowledgeable and ready to help

There is a wide range of systems available for all situations, including automated control systems that will deploy the external shades as weather conditions change. This ensures that a constant temperature is maintained inside the building, thus increasing comfort levels for the occupants.

It is advisable to check details of the legislation with your accountant.

Contact us for more information on external shading.

About the author

Daniel James Managing Director