Company Tax on Wind Turbines

Company Tax on Wind Turbines

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I have a client who has decided to install and run 3 wind turbines as a completely individual Ltd Co. These have costs exceeding £1m and are currently being held as assets under construction. I am wondering if there are any Enhanced Capital Allowances available for when we eventually capitalise the turbines. The project is looking to take around 2-4 years for completion. Any help is much appreciated.

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By blok
18th Oct 2013 13:23

most of the £1m project cost

most of the £1m project cost will qualify for CA's, except for the costs that don't help bring the plant into use, legal fees for example. 

IMO these are not long life assets so should get 18% WDAs.

Professional fees - Feasability studies, I'd argue these were capital costs integral to the installation of the turbines selected.  HMRC may disagree. 

Other more obvious fees such as design, groundwork and engineering should quailfy.

The company will get AIA but only on costs incurred in the period in which the qualifying activity starts, which will be when the blades turn (or are ready to generate power).

There are no other enhanced allowances available.

The accounting and tax treatment of the grid connection is often not clear.  Some would argue that it is a fixed asset with no allowances, others will argue that its an intangible (licence) and amortisation allowed.  I've seen it argued that its a prepayment and set against the FIT duration of 20 years

 

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