Explanatory note

This Order amends the Capital Allowances (Environmentally Beneficial Plant and Machinery) Order 2003 (S.I. 2003/2076, the “principal Order”). The principal Order implemented legislation to introduce a scheme for 100% first-year allowances to encourage businesses to invest in environmentally beneficial plant and machinery (as defined by section 45H of the Capital Allowances Act 2001 (c. 2)).

Section 45H enables the Treasury to specify qualifying plant and machinery by order by reference to a description or criteria given by the Secretary of State in a technology or product list. The Secretary of State for Environment, Food and Rural Affairs has issued the Water Technology Criteria List and the Water Technology Product List. These lists have been revised and replaced by new lists issued on 1 July 2013. This Order amends the principal Order to reflect the new lists.

The Order also amends the descriptions of the environmentally beneficial plant and machinery technology classes to reflect the addition of a new qualifying technology class (greywater recovery and reuse equipment) in the Water Technology Criteria List and the Water Technology Product List. Broadly, greywater recovery and reuse equipment is purpose-designed equipment containing one or more treatment processes with associated storage, pumping and control systems that accept and treat greywater from baths, showers, washbasins or laundry.

The Water Technology Criteria List and the Water Technology Product List are available at https://www.gov.uk/government/publications/water-efficient-enhanced-capital-allowances.

A Tax Information and Note covering this instrument was published on 20 March 2013 alongside Budget 2013 and is available on the HMRC website at http://www.hmrc.gov.uk/budget2013/tiin-4016.pdf. It remains an accurate summary of the impacts that apply to this instrument.