Theyâ€™re a valuable form of tax relief available to anyone incurring capital expenditure buying, building or making adjustments to commercial property.
In basic termsÂ they are a way for the owners of commercial property to reduce their tax bills.
Examples of properties on which capital allowances can be claimed include:
- Hotels and B&Bs
- Nursing and residential homes
- Dental and GP surgeries
- Factories and industrial units
- Filling stations and garages
- Depots and warehouses
- Haulage yards and transport facilities
- Offices and retail stores
According to research, more than 9 in 10 owners of UK commercial property â€” from the smallest newsagent to a 30-storey office block â€” will be due a tax benefit from HMRC as a result of unused capital allowances tax relief.
To date our Specialists have identified more than half a billion pounds of unused capital allowances for over 5,000 clients. The average claim is around ÂŁ125,000, with the biggest in the tens of millions.
But why is so little known about unused capital allowances?
Firstly, HMRC, understandably, isnâ€™t that keen on alerting too many people to it, especially at a time when the Treasuryâ€™s coffers are bare.
Secondly, the problem, historically, has been that identifying capital allowances within commercial properties is extremely complex, so much so that even accountants only scratch the surface.
Indeed, whilst accountants will continue to claim on more obvious items such as shutters and curtains, fire extinguishers and carpets, generally speaking they will not drill down to the items where the far more significant costs to a business lie. These might include cabling, air conditioning, heating, lighting and security systems.
Specialist capital allowances firms, on the other hand, draw on a far more detailed understanding of capital allowances practice and law and carry out an in-depth forensic survey of the property (or properties) in question.
Whether a commercial property was purchased recently, or many years ago, we are able to prepareÂ a capital allowances report enabling relief to be obtained.
Whilst the fact that the property may have been purchased several years ago is irrelevant with regardsÂ to the ability to make a claim, there are limitations on the amendment of tax returns for individuals,Â partnerships and limited companies. There is a 12 month window after the due filing date for a tax return inÂ which an amendment can be submitted. So as long as that window is still open, it is possible to amend theÂ return. The ability to do this may lead to significant tax refunds and, in the majority of cases, reductions inÂ ongoing tax liabilities.
Capital Allowances can only be claimed once so its essential that your claim is maximised. This is why we work hand in hand with your accountant to ensure nothing is missed.
Call Stratagem Intelligent Income Strategies to support you in maximising a successful claim.