Tax relief on capital investment to help you reduce your energy bills

Tax relief on capital investment to help you reduce your energy bills

1.Introduction:

According to the government there are temporary tax reliefs available for plant and machinery which can incentivise companies to invest in equipment. For expenditure incurred from 1 April 2021 until the end of March 2023, companies can claim 130% capital allowances on qualifying plant and machinery investments. Under the super-deduction, for every pound a company invests, their taxes are cut by up to 25p.

Source: New temporary tax reliefs on qualifying capital asset investments from 1 April 2021 – GOV.UK – www.gov.uk

This means that any customer investing in Airius destratification equipment would be able to benefit not only from the typical 20-50% reduction in energy usage but will be able to achieve additional financial benefit through the tax offset.

Benefit from tax offsetting when installing Airius Destratification

2. Why is the government introducing a super-deduction?

Since the Covid-19 pandemic, existing low levels of business investment have fallen, with a reduction of 11.6% between Q3 2019 and Q3 2020.

  • • Much of the UK’s productivity gap with competitors is attributable to our historically low levels of business investment compared to our peers. Weak business investment has played a significant role in the slowdown of productivity growth since 2008.

  • • Making capital allowances more generous works to stimulate business investment. As a result, these measures can promote economic growth and counter business cycles.

  • • Making capital allowances more generous works to stimulate business investment. As a result, these measures can promote economic growth and counter business cycles.

  • • The super-deduction will give companies a strong incentive to make additional investments, and to bring planned investments forward.

Source: https://www.gov.uk/government/publications/new-temporary-tax-reliefs-on-qualifying-capital-asset-investments-from-1-april-2021/new-temporary-tax-reliefs-on-qualifying-capital-asset-investments-from-1-april-2021

3. What do the new capital allowances offer?

As a result of measures announced at this Budget, businesses will now benefit from four significant capital allowance measures:

  • • The super-deduction – which offers 130% first-year relief on qualifying main rate plant and machinery investments until 31 March 2023 for companies

  • • The 50% first-year allowance (FYA) for special rate (including long life) assets until 31 March 2023 for companies

  • • Annual Investment Allowance (AIA) providing 100% relief for plant and machinery investments up to its highest ever £1 million threshold, until 31 December 2021

  • • Within Freeport tax sites, companies can access new Enhanced Capital Allowances (ECA+) and companies, individuals and partnerships can benefit from an increased level of Structures & Buildings Allowance (SBA+) for investments until 30 September 2026

Source: https://www.gov.uk/government/publications/new-temporary-tax-reliefs-on-qualifying-capital-asset-investments-from-1-april-2021/new-temporary-tax-reliefs-on-qualifying-capital-asset-investments-from-1-april-2021.

4. What types of plant and machinery are eligible?

Most tangible capital assets used in the course of a business are considered plant and machinery for the purposes of claiming capital allowances.

Airius Destratification Fan Range

There is not an exhaustive list of plant and machinery assets. The kinds of assets which may qualify for either the super-deduction or the 50% FYA include, but are not limited to:

  • • Solar panels

  • • Computer equipment and servers

  • • Tractors, lorries, vans

  • • Ladders, drills, cranes

  • • Office chairs and desks,

  • • Electric vehicle charge points

  • • Refrigeration units

  • • Compressors

  • • Foundry equipment

Source: https://www.gov.uk/government/publications/new-temporary-tax-reliefs-on-qualifying-capital-asset-investments-from-1-april-2021/new-temporary-tax-reliefs-on-qualifying-capital-asset-investments-from-1-april-2021.

How can Airius help?

Airius have a range of unique, innovative fan solutions that save businesses between 20-50% of their use of energy – reducing consumption, bills and reducing the carbon footprint of your building. Our fans have reduced the bills of thousands of companies whether they are located in offices, warehouses, retail showrooms, hangars, factories, schools, hospitals – the solution works everywhere in combating the energy price rises!

Airius to date have approximately saved over 1.25 million tonnes of carbon. To put this into perspective, this is the approximate equivalent of:

2,118,644 flights from London to New York1

166,666 homes in one year2

Driving 7,500,000,000 km in a diesel car, which is 187,000 times around the globe3

Sources

  1. Travel Navigator
  2. ccfpd.org
  3. Crown Oil

Too good to be true? How does it work?

All buildings naturally have a challenge balancing the temperature flow within the environment – this natural phenomenon is known as thermal stratification. Hot, lighter air rises towards the ceiling. Cool air falls to the floor. The result is a dramatic temperature difference between the floor and ceiling.

The main negative consequence of thermal stratification is that your heating, ventilation and air conditioning (HVAC) systems have to work harder to maintain an even temperature. Your HVAC systems have to over-deliver on hot or cool air in order to resist the effects of thermal stratification. Consequently, your energy bills are higher and the condition of your environment is rarely ideal.

Buildings with high ceilings are more likely to suffer from extreme temperature differences. Wasted heat will inevitably rise to the top of your building and have the opportunity to increase in temperature by up to 14°C. Conversely, heavier cooled air which is more difficult to distribute is wasted by sinking to low points in a building or by becoming trapped in difficult to circulate areas.

Airius Destratification Systems

Airius Destratification Fan Range for Heating & Cooling

To combat the problem of thermal stratification, we have a range of destratification fan systems that will balance the internal temperatures in your building, by recirculating existing heat and any additional heat generated from people, processes or solar gain.

Our systems will also reduce the operation time and workload required of heating and cooling systems significantly.

Where has this worked?

Lush Cosmetics Reduce heating costs with Airius destratification fans

Lush – reduced heating costs by 60%!

Lush Retail Ltd needed to improve internal conditions at their Hatch Pond Road factory facility in Poole, Dorset. Temperatures at floor level were uncomfortably cold as their heating system was unable to reach acceptable conditions. This also incurred high energy costs as the heating system was running constantly in an attempt to reach set parameters.

Following installation of the Airius system heating costs for the site were reduced by over 60%!

British Airways Reduce Costs with Airius Destratification Fans

British Airways – Improving Comfort While Reducing Costs & Carbon

British Airways Install Airius Destratification Fans to reduce energy costs

With the typical high ceiling in British Airway’s East Penn maintenance hangar at Heathrow Airport, the expensively heated air was immediately rising to the ceiling and gathering where it was not required. This in turn increased the temperature difference from inside to outside, resulting in accelerated heat loss, increasing heating costs and an uncomfortably cold environment for employees.

The Airius destratification fans installed immediately improved the environment even before the heating/cooling system had been upgraded, simply by circulating the heated air supplied from the existing HVAC system more efficiently, reducing load, run time, costs and energy.

Summary

Many companies and households have huge challenges to face with energy price rises, especially with further increases expected in October and into 2023.

At Airius we love what we do, and we want to help!

We are improving living and working conditions for all, reducing costs for businesses and reducing energy consumption to lessen the impact of climate change and make a real contribution towards the protection of our environment.

Through our unique expertise,  passion, customer dedication and the best technology, Airius will deliver unparalleled comfort and protection.

We provide the whole service – advice, design, installation, service and maintenance.

We are here to help!