InBus_Win09_1-55:InBusiness 1-61 11/12/2009 16:13 Page 4
FEATURE | CSR Awards
Business |NEWS
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Breaking news from the world of business.
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A new way to get money back from the tax man!
Further
BUSINESSES LOOKING to reduce energy However, under the ACA scheme, when
costs by investing in energy efficient money is spent on eligible energy efficient
interconnection
equipment can now doubly benefit through a capital equipment, the company can deduct with Britain is
new tax incentive scheme called Accelerated the full cost of this equipment from their
economically
Capital Allowances (ACA). profits in the year of purchase, i.e. the taxable
attractive
Under the ACA scheme, when money is profit in year one is reduced by the full cost of
spent on eligible energy efficient capital the equipment. Importantly, this saving is on FURTHER ELECTRICITY
equipment, the company can deduct the top of the energy savings that the company interconnection between
Dermot Byrne, Chief
full cost of this equipment from their profits in will make through investing in energy efficient Ireland and Britain is
Executive, EirGrid.
the year of purchase, i.e. the taxable profit in equipment. economically attractive, according to the
year one is reduced by the full cost of The ACA benefits all companies liable for “Interconnection Economic Feasibility Report”, a
the equipment. corporation tax by: recent report from EirGrid, Ireland’s transmission
This contrasts with the existing Capital Reducing tax liabilities. system operator. The report examines the
Allowances tax structure (also referred to as Increasing cash flow. possibility of further interconnection between the
Wear and Tear Allowance) for plant and Reducing energy costs in a sustained and island of Ireland and Great Britain or France and
machinery on which ACA is based. With the ongoing basis. also reinforces the strong economic case for the
existing Capital Allowances tax structure, when It is important to note, particularly in these 500MW East-West Interconnector, linking Ireland
money is spent on capital equipment difficult trading periods, is that if a company does and Wales, which is currently under development
companies can only deduct the cost of this not make a profit in the year of purchase, the and is scheduled to go live in 2012.
equipment from their profits proportionally capital allowance can be carried forward and The report found that a third 500MW
over a period of eight years, i.e. the annual offset against profits in following years. interconnector to Britain would be economically
taxable profit is only reduced by 1/8 of the To find out what equipment qualifies for the attractive by 2020, and even more so in 2025. A
total equipment cost. ACA, log on to
www.sei.ie/aca. fourth 500MW interconnector between Ireland
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and Britain would be economically feasible by
2025 in some situations, such as a high renewable
START CUTTING YOUR
energy scenario. Today, the Moyle Interconnector,
connecting the electricity grids of Northern Ireland
LIGHTING COSTS
and Scotland, is the only link between the island of
Ireland and Great Britain.
ESB CUSTOMER SUPPLY, working with Philips, Osram and GE, “Interconnection between the all-island power
have launched a guide that offers a complete range of energy grid and other grids has the potential to deliver
efficient alternatives. The guide offers tips on how your business can numerous benefits to the island,” said Dermot
make savings on lighting by using energy efficient lightbulbs. For Byrne, Chief Executive of EirGrid, at the launch
example, if you have 60 x 50W, 12 volt halogen spotlights and you of the report. “In particular, interconnection
replace them with the energy efficient IRC equivalents, you will save enhances security of supply, promotes
€550* a year on your electricity bill. competition in the electricity sector and facilitates
Lightbulbs in pubs, hotels and restaurants are typically switched the expansion of renewable energy generation.”
on for 12 hours per day. At that level of usage energy efficient Possible interconnection between Ireland and
alternatives can pay for themselves in as little as one month. A small investment in energy efficient France was modelled based on 2015, 2020 and
lightbulbs will mean great savings in the long run. 2025 scenarios. According to the report’s findings,
Energy saving products featured in the guide are available through participating electrical there are some indicative benefits, however it
wholesalers. ‘Start cutting your lighting costs’ is available to download from the ESB website, concludes that the results need to be corroborated
www.esb.ie/business. by more detailed modelling before any
* Based on electricity price of 14c/kWh and lighting switched on for 12 hours daily. recommendations could be made.
4 InBusiness Winter 09
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