How much tax relief does it take to change a light bulb

The extension of Enhanced Capital Allowances to include electrical systems may be one of the most important changes under the new system, according to property tax and finance specialist Davis Langdon Crosher & James. The company has carried out a modelling exercise on a new office scheme showing stark comparisons between conventional lighting which can be written off against tax at 10% a year and low-energy lighting that qualifies under the Enhanced Capital Allowances scheme for 100% first-year allowances. The savings for the low-energy lighting amount to £174 000 over 10 years. Capital-allowances relief from conventional technology is only £54 711 over the same time frame. David Rees, a partner with DLC&J, says, ‘Although on the surface there may have seemed little to cheer about in the Budget, the change to capital allowances could yet have a significant impact on building specifications and energy performance. If the Chancellor was looking for good news topics, this is one that slipped the net. Added to which, there is still only limited publicity regarding interest-free loans from the Carbon Trust of up to £100 000 towards low-carbon or energy-saving technologies.’