Understanding Capital Allowances
Simply put- a way to reduce your taxable profits
Capital allowances are a form of tax relief available to businesses and property owners. Allowing them to claim tax deductions on certain types of capital expenditure. In simple terms, it’s a way to reduce your taxable profits and ultimately, your tax bill.
The Key Benefits
Immediate financial relief
One of the primary benefits of capital allowances is their ability to accelerate tax relief. Unlike other forms of tax relief that may be spread over several years. Capital allowances can often be claimed in the year the costs were incurred, providing immediate financial relief.
They can apply to a wide range of assets within commercial properties. These can include machinery, equipment, fixtures and fittings, and integral parts of the building. A form of capital allowance called “Structures and Buildings Allowance” is also available on many parts of a building where the usual capital allowances don’t apply. This means that whether you own a factory, an office building, or a retail space, – you should be considering capital allowances to help mitigate tax liabilities.
Navigating the Complexity
Working with experts who understand the legisaltion
While capital allowances offer significant tax-saving opportunities, navigating the complexities of the system can be daunting. That’s where specialist advisors come in. Working with experts who understand the intricacies of capital allowances legislation can ensure you maximise your claims. All while remaining compliant with HMRC regulations.
The Importance of a Review
A thorough review conducted by professionals
It’s essential for those who spend money buying, building, extending, or improving property to regularly review their capital expenditure. Therefore, you can identify potential capital allowance claims. Even if you haven’t previously claimed allowances, it’s better to explore any opportunities now before it is too late. As in many cases, enhancements can be made. A thorough review conducted by experienced professionals can uncover missed opportunities and put money back in your pocket.
The Misunderstanding
In many cases, a specialist survey is needed
Many believe their accountant has taken care of everything. However, even though an accountant does a great job of claiming expenditures they can see in invoices. Without carrying out a specialist survey, items within the building that can’t be identified through invoices can be overlooked. This can result in a large amount of unclaimed tax relief.
Looking Ahead
Claiming commercial property tax relief
As the landscape of commercial property ownership evolves, staying informed about available tax reliefs is crucial. Capital allowances remain valuable for property owners seeking to minimise their tax burden and maximise their financial efficiency. By understanding the benefits, navigating the complexities, and seeking expert advice, you can unlock the full potential of capital allowances. Securing a brighter financial future for your commercial property investments. Each month we send out a newsletter that keeps you up to date on all things capital allowances and has benefitted many of our clients and advisors.
If you would like to seek advice from our expert team, please get in touch...
Latest News
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5 December 2024What Are Qualifying Activities for Capital Allowances?
Capital allowances are a key tax relief available to businesses for qualifying activities. They allow businesses to deduct the cost of certain capital expenditures related to these activities from their taxable profits, reducing their overall tax burden. However, not all purchases or investments qualify.... -
3 December 2024How Do CARS Assess Capital Allowances?
At CARS, we assess capital allowances and offer businesses and property owners a significant opportunity to reduce their tax liabilities by deducting qualifying capital expenditures. Here at Capital Allowance Review Service (CARS), we provide a thorough process to optimise these claims. Our goal is to...
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