Why don’t accounting routines maximise Capital Allowance claims?

There’s no doubt accountants have an established routine for assessing Capital Allowances and therefore it’s important to stress that we’re not questioning their or your ability. We look to enhance the level of Capital Allowances claimed by introducing additional disciplines that add value to the accountant’s work. For example, a survey is completed on the property to identify items that are not visible within the paperwork and sit within Land & Buildings on the Balance Sheet (not Fixtures & Fittings). Stage Payments for leasehold improvements or property builds are a good example of where our process creates the required detail to maximise Capital Allowances.

Is now a good time to review your client’s capital expenditure?

You may have information about Property Embedded Capital Allowances but you’re not sure whether you’re comfortable with progressing a claim.

It is natural to have some uncertainty/nervousness about our expertise and quite often think it’s too good to be true.  This is why our approach over the past 19 years has been to support advisors across the UK, creating trusted relationships.  We look to confirm, with certainty, that a claim is possible before progressing the practicalities of the process.  This confirmation is shared with clients and their advisors to ensure all parties are comfortable with our approach.

We’ve heard of other accountants that haven’t had a good experience with other firms as well as fees that were not transparent.

Although we have operated for many years and achieved testimonials on our website, we have recently started to build our Google reviews.  This is proving to be a great way of giving clients and advisors some reassuring reading.  We maintain a ‘no win, no fee’ fee structure with no upfront costs, giving clients the peace of mind that they are not exposed to any risk in progressing a review.  It’s just as important that both long-term and short-term benefits are considered when reviewing the client’s tax profile and cashflow.  This is completed at the start of our process as to how the tax benefit is crystalised through Capital Allowances can differ from one case to the next.

How do I know if this is something my clients can benefit from?

We would encourage you to complete a review if you answer yes to both of the following questions:

  1. Has your client spent significant capital buying and/or improving a commercial property that is in use for the purpose of trade or rental business?
  2. Is the entity that spent the capital paying or liable to UK tax i.e an individual, a company, partnership, overseas landlord, etc?

Could your clients be missing out on valuable tax relief?  The savings chart below shows approx. value of tax savings.

 

Property Purchase Price Property Embedded Fixtures & Fittings Available (20%) Savings if liability to tax is 19% Savings if liability to tax is 20% Savings if liability to tax is 40%
£300,000 £60,000 £11,400 £12,000 £24,000
£500,000 £100,000 £19,000 £20,000 £40,000
£1,000,000 £200,000 £38,000 £40,000 £80,000
£2,000,000 £400,000 £76,000 £80,000 £160,000
£10,000,000 £2,000,000 £380,000 £400,000 £800,000
No maximum limit 20% is typical but amounts may vary. The majority of these figures are written down within 5 years

Capital Allowances do not only apply to freehold property. If you have completed leasehold improvements or incurred significant costs extending or refurbishing a property you have owned for a number years, these costs could also qualify for tax relief.

Still not sure whether to progress a claim? Contact us to find out how we can help your clients to save tax, 0330 174 1339.

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Our expert team are here to help answer any of your capital allowances questions or enquires you have about your commercial property.

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