CARBON TRUST LOAN - FACTS:

"Purchase your LED lighting with a Carbon trust Loan"

Borrow £3,000 to £100,000 at 0% interest

0% business loans of £3,000 - £100,000 are available from the Carbon Trust to help organisations finance and invest in energy saving LED Lighting.

Why a 0% business loan makes business sense:

• You can borrow between £3,000 and £100,000 interest free

• Anticipated energy savings offset the loan repayments. So new LED Lighting should pay for itself and you should continue to make savings year on year

• The loans are government funded and unsecured

• A straightforward and fast application process with no arrangement fees

• You’ll receive a conditional offer within 24 hours of your application being processed

• Loans can be repaid over a period of up to 4 years

• You can track the progress of your application online

An important update on 0% business loans:

From 9 July the following changes are being made to the loans eligibility criteria:

• The 0% business loans will only be available to SMEs* (except for project sites in Northern Ireland, which is open to any size enterprise).

• The amount of CO2 that must be saved per £1,000 of loan will increase from 2t CO2 to 2.5t CO2.

All applications submitted after 9 July or applications which receive an unconditional offer after 23 July will be subject to the new rules.

* Micro, small and medium-sized enterprises (SMEs) are enterprises which employ fewer than 250 full-time equivalent employees and have an annual turnover not exceeding €50m (£42.5m), and/or an annual balance sheet total not exceeding €43m (£36.5m).

The Enhanced Capital Allowance (ECA) - FACTS:

"Claim 100% first-year capital allowance on your LED Lighting"

How does the ECA scheme work?

The Enhanced Capital Allowance (ECA) scheme enables businesses to claim 100% first-year capital allowance on investments in LED Lighting, against the taxable profits of the period of investment.

All businesses that incur qualifying spending can claim ECAs. ECAs bring forward the time that capital allowances are available for spending on LED Lighting thereby providing a cash flow advantage.

A higher standard of energy-saving:

Capital allowances enable businesses to write off the capital cost of purchasing LED Lighting against their taxable profits. They take the place of depreciation charged in commercial accounts.

The general rate of capital allowances is 20% a year on a reducing balance basis. For example, if a business spent £1,000 on LED Lighting, it could claim capital allowances of £200 (20% of £1,000) against the taxable profits of the period of investment. Assuming the company pays corporation tax at 28%, the effect of the capital allowance for spending on LED Lighting in the period of investment would be to reduce the business’s tax bill by £56 (£200 @ 28%).

The unrelieved balance of £800 (£1,000 less £200) is carried forward for relief against profits of later years. In this way the spending is written off over a number of years.

If, however, the business invested the same amount in LED Lighting it could claim an 100% first-year capital allowance of £1,000 against the taxable profits of the year of investment. Again assuming the company pays corporation tax at 28% the effect of the first-year allowance would be to reduce the business’s tax bill by £280 (£1,000 @ 28%). Thus, the first-year allowance can confer a cash flow advantage.

The 100% first-year capital allowance relieves all the qualifying spending. Therefore there is no unrelieved spending to carry forward against profits of later years.

Claiming LED Lighting on an ECA:

If a business wants to claim an ECA on any new LED lighting equipment it installs, it should let its manufacturer / supplier know. The manufacturer / supplier of lighting equipment should be able to advise that businesses on which of their products are eligible for an ECA. Therefore businesses looking to purchase lighting products should seek confirmation of compliance for the products they intend to purchase to the ETL criteria from the product manufacturer / supplier. The confirmation issued by a manufacturer / supplier should then be used to support an ECA claim.

Download the ECA criteria for LED Lighting here: ECA - LED LIGHTING

Please contact our sales team on 0844 8565 201 who will inform you which LED products are included on this scheme and answer any further questions you may have.