HELP WITH CAPITAL ALLOWANCES
Individuals and businesses owning commercial property can potentially save significant amounts of UK income and corporation tax through capital allowances.
LOWERING YOUR TAX LIABILITY
Capital allowances are an entirely legitimate, recognised part of the UK tax regime. Unlike many HMRC reliefs, capital allowances allow tax relief to be given or denied by statutory principle (Capital Allowances Act 2001), rather than by virtue of accounting standard.
Some of the rules on capital allowances are very complex – even for trained professionals and claiming this relief requires a variety of expertise such as legal, taxation, accounting and valuation, which are all skills that our dedicated experts have.
If you have purchased, built, or renovated a commercial property, our process has proven to maximise capital allowance claims and secure significant tax savings.
So if you’re looking to submit a claim or have some questions regarding your eligibility, feel free to get in touch with our team and we’ll do our best to help you. We’ve also included some helpful information to do with capital allowances for you below.
Our Step-by-Step Process
We will then produce your claim summary and determine the best approach for tax.
Want to find out more? Click here to contact us so we can assess your situation and how we can assist you.
What are Capital Allowances?
Capital allowances are a tax relief that can be claimed for property improvement or development. When you buy or improve a commercial property, HMRC allows you to use some of the money you have invested to set against your tax bill.
Plant and machinery and integral features are two of the main reliefs that make up capital allowances. Plant and machinery is equipment or apparatus used for running your business and can include fire doors, lighting and data points. Integral features are the necessary fixtures for your building which can include heating installations and air conditioning.
Below are some example savings you can make with capital allowances:
Plant & Machinery: 18% of the total costs. So if your Fire Alarm system costs £2,000, the allowances for the first year would be £360.
Integral Features: 6% of your total costs. So if your electrical rewiring costs £5,000, the allowances for the first year would be £300.
Who Can & Can't Claim?
We’ve broken down below for you some guidance on who can and can’t claim capital allowances.
Who Can Claim: Commercial Property Owners or Long Lease Holders or those paying UK Corporation or Personal Tax, but to do so the property must be part of a qualifying activity, such as trade and professions An overseas property business or furnished holiday let in the UK or European Economic Area would also be viable for a claim.
Claims Can’t Be Made By: Pension Fund Property Owners, Charitable organisations who own property, National & Local Government-owned properties, non-UK tax payers or companies trading property as stock.
Frequently Asked Questions
Capital allowances are a specialist and not well-known area of taxation, however, they have been established in law since 1878.
No, once the claim has been accepted by HMRC, they are there to be set against the tax of whoever owns the property.
You are able to use the tax savings made from the Capital Allowances towards any CGT you may have to pay.
Our fees are based on a percentage of the Capital Allowances that we find. We aim to recoup the fees from your tax savings rather than asking for a payment up-front.
You can claim for the non-dwelling and communal areas in these properties. The usual savings average from 10% - 12% of the original purchase price.
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