Capital Allowances – Are you sitting on a windfall?

With successive governments continually raising the ante in terms of what they consider to be ‘acceptable’ tax planning, it is perhaps surprising to know that many businesses are continuing to sit on literally thousands of pounds of unclaimed tax refunds in respect of the commercial properties they own.

We usually find that relief is routinely claimed on everyday ‘moveable’ items within a commercial property, such as curtains, carpets, fire extinguishers, radiators and the like.

However, the grey area that is often overlooked is that which lies between moveable and immoveable assets; i.e., those assets that are integral to the fabric of the building. This in itself is a specialised area requiring expert knowledge in various fields, including property design, construction and construction costs, land values and, last but not least, tax.

There are around 1.4m commercial properties in England and Wales and, according to government figures, some commentators are estimating that as much as £50-70bn of allowances are currently lying unclaimed.

Sadly, from what we have seen, we are not surprised by the size of these figures. Figures also indicate that less than 5% of businesses are claiming their full entitlement to capital allowances.

Now is the time to act. It is not just current year acquisitions that qualify. A claim can still be made, irrespective of how long the property has been owned.

We work closely with various surveyors that specialise in identifying hidden capital allowances and are happy to consider any potential claim that you or your client may have – there is nothing to lose, as we are happy to work purely on a no win, no fee basis!!

Any business that owns a commercial property and is a UK taxpaying entity ought to consider whether they have maximised their entitlement to previous claims to capital allowances.

Allowances will generally be available on:

ü The purchase of an existing building

ü The construction of a new property

ü The alteration, extension or refurbishment to a commercial property

ü The fit-out of a let property

As a broad estimate, the following allowances could potentially be available:

Type of property Typical range of potential allowances

Commercial 18% – 30%

Retail Up to 15%

Healthcare 20% – 30%

Industrial 5% – 20%

Leisure 18% – 30%

Education 15% – 25%

Examples could include Care Homes, Caravan Parks, Office Blocks, Student Apartment Blocks, Leisure Parks, Cinemas, Day Nurseries, Car Dealerships, Veterinary Practices, Medical Practices, Hotels, Health Centres and Garden Centres.

Pointers

  • Capital allowances offer tax relief on certain assets you buy for your company
  • Any business that owns a commercial property and is a UK taxpayer is entitled to capital allowances
  • Allowances are available when you buy an existing building, build a new property, alter, extend or refurbish a commercial property, or fit-out a let property
  • They do not apply to the buildings themselves, but the fixed assets of a property, for example lighting, cabling, radiators, and air conditioning units
  • Many businesses are sitting on thousands of pounds of unclaimed capital allowances
  • An estimated £50-70bn of allowances are currently lying unclaimed in the UK
  • Less than five per cent of businesses are claiming their full capital allowance entitlement
  • A claim can still be made no matter how long the property has been owned
  • We work closely with specialist surveyors to identify hidden capital allowances. Get in touch to see if you are claiming your full entitlement
  • We are happy to work on a ‘no win, no fee’ basis, so you’ve got nothing to lose

Apr 14, 2015