Capital allowances & the low-carbon energy sector

Matthew Hodkin

Matthew Hodkin Nestling between two much more heralded consultations on capital allowances released on 31 May 2011 was a little-discussed consultation on the interaction between fiscal incentives in the low-carbon energy sector and capital allowances.

At first glance this appears to say little more than the obvious – that the entitlement of a business to capital allowances on certain assets should be restricted in circumstances where the assets in question will also qualify for government subsidy under other schemes.

However on further review this consultation does throw light on the implications of recent policy in the energy sector as well as some trends in HMRC’s attitude to capital allowances.

In short the consultation proposes that expenditure on assets that...

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