An individual or a company may experience many or few HMRC enquiry’s during their working life cycle. It’s an experience very few (if any) would welcome and once an enquiry has started, it very rarely has a swift or stressless conclusion. Capital Allowance Review Service continues to build its client’s numbers and technical prowess when working with clients and completing their Property Capital Allowance claims.
About the Enquiry
Our client based in the Midlands had been subject to a lengthy HMRC Enquiry into routine compliance issues. Naturally, the enquiry had been a slow, drawn-out process showing no sign of conclusion. There was a Property Embedded Capital Allowances audit being carried out on the group properties which produced a figure of £984,000 in unclaimed Capital Allowances. The inspector was informed that the claim was going to be submitted and it was felt the correct course of action was to inform the enquiry team at an early date so they could include it in their deliberations.
As a result, a meeting was arranged with HMRC. The inspector perused the working papers of the claim and immediately offered to agree to two-thirds of the claim. The offer was rejected and it was explained how the numbers had been compiled and that they were quite welcome to scrutinize the due diligence applied when putting the claim together. Following a conversation as to what HMRC hoped to achieve through the enquiry, it appeared that the tax they had in mind was a large number but would easily be ‘blown out of the water’ by the Property Capital Allowance claim.
It was agreed there would be a payment to HMRC of outstanding tax which was to be recovered by the taxpayer the following year. The Property Capital Allowance claim was agreed in full and the enquiry was closed.
If an enquiry or investigation is ongoing and the individual, partnership or company has commercial property interests, there is a distinct chance the conclusion of HMRC can be mitigated and the time-scales reduced.
PLEASE NOTE THAT IF THE ENQUIRY HAS BEEN COMPLETED WITH A SUCCESS TO HMRC, A CAPITAL ALLOWANCE AUDIT COULD RECOVER SOME OR ALL OF THE COSTS & PENALTIES.
5 December 2023
Capital Allowances ManualCapital allowances play a significant role in taxation. Allowing businesses to claim deductions for the depreciation of their assets. Among these assets, plant and machinery are frequently mentioned. However, the term “plant and machinery” is not explicitly defined in tax law. It should also...
22 November 2023
Autumn Budget 2023: Changes to Capital AllowancesThe Autumn Budget of 2023 has arrived, and with it comes significant changes and developments the government has put in place. Chancellor Jeremy Hunt delivered the statement on Wednesday, 22 November 2023. For businesses and individuals alike, these adjustments in tax policies can have far-reaching implications.
Our expert team are here to help answer any of your capital allowances questions or enquires you have about your commercial property.