Pearse Doherty (Donegal South West, Sinn Fein)
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73. To ask the Minister for Finance the revenue that could be raised for the Exchequer by reducing the energy efficiency capital allowances from 100% to 50%; and the conditions applicable to avail of this allowance. [22006/13]

Michael Noonan (Limerick City, Fine Gael)
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Under TCA, section 285A, accelerated capital allowances at a rate of 100% are available for certain energy-efficient equipment for use in a company’s trade. Accelerated capital allowances under Section 285A are only available to companies, not individuals. The equipment must be approved and listed by the Minister for Communications, Energy and Natural Resources. The following conditions must be met:

- A person carrying on a trade must incur capital expenditure on the provision of machinery or plant for the purposes of that trade;

- The machinery or plant must belong to that person, not leased, let or hired;

- The machinery or plant must be in use at the end of the chargeable period for which the allowances are claimed;

- While the machinery or plant is used for the purposes of the trade, it must be wholly and exclusively so used.

I am informed by the Revenue Commissioners that on the basis of the estimated cost of claims relating to energy efficient capital allowances for accounting periods ending in 2011, the estimated gain to the Exchequer by reducing these capital allowances from 100% to 50% could be in the region of €0.7m.

However, this estimate assumes no behavioural changes on the part of taxpayers, and reductions in the amount a taxpayer can claim may have a significant behavioural impact and may not produce a corresponding increase in tax yield. In current economic conditions any estimate of additional yield must be treated with caution.