Concern at hiccup in tax-relief plan

Trade

Pictured: HP Ireland’s Ciaran Hynes

A laudable tax-relief incentive announced in last year’s national budget to allow businesses to write off 100% of the cost of energy-efficient enterprise servers and storage has led customers to delay purchasing decisions until they know which products qualify.

The period for public consultation on the draft eligibility criteria for qualifying ICT products in the accelerated capital allowance (ACA) scheme, which includes categories such as enterprise servers, enterprise storage, uninterruptible power supplies and power management, has just ended.

A spokesman for Sustainable Energy Ireland (SEI) which is overseeing the process, revealed it was likely to be mid-summer before a list of qualifying products is published. There are concerns the length of the process will lead some customers to delay purchasing decisions until they know whether a product qualifies for 100% tax relief.

Ciaran Hynes, head of servers and storage for HP Ireland, said the Government and Department of Finance should be commended for introducing the scheme, which he believed was unique to Ireland, but added that the SEI needed to ensure it was “fast-tracking” as much of the process as it could.

Customers aware of the potential tax breaks would be tempted to delay buying decisions and sweat the assets more until they knew which products qualified for the write-offs, he warned.

“It’s going to form a significant part of the criteria for their decision-making,” Hynes added.

James Finglas, MD at MJ Flood Technology, agreed the draft criteria were very wide, saying they probably covered the enterprise server ranges of all the manufacturers.

Flood also raised the issue of how much the Government was prepared to provide for the capital allowance scheme. If the scheme were heavily promoted but the total figure for the write offs were set too low, it could cause disillusionment and “leave a bad taste in the mouth”.

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