What are Property Embedded Fixtures and Fittings (PEFFs)?
Property Embedded Fixtures & Fittings (PEFFs) are a specialist element of the well-known subject of capital allowances.
Due to this specialism, they are often missed during capital allowances claims, resulting in major tax benefits being missed.
Are you missing out on Property Embedded Fixtures and Fittings (PEFFs)
As a matter of course, accountants identify ‘movable’ items which qualify for capital allowances. These obvious movable items such as desks, chairs, computers, cars, etc.
However, many are unaware of the qualifying integral fixtures & fittings embedded within the property that are essential for a business to carry out its trade.
This leaves an enormous amount of unclaimed qualifying ‘immovable’ items on which capital allowances can be claimed. These items can either be inherent within the property at the time of acquisition or that have been subsequently installed.
The Elephant in the Room
Functionality and Embedded are key to our approach.
Plant & Machinery is not defined in law. This creates a misunderstanding and confusion about what does and doesn’t qualify and it is often assumed that all Capital Allowances have been claimed.
A key difference that we can offer is adding value to the work of a good but non-specialist Accountant, as an Accountant’s review normally begins and ends with analysing invoices and following the paper trail.
We will visit the property and identify the embedded items which are not available within the paperwork.
Everything you need to know about PEFFs
Why are embedded fixtures and fittings missed?
Until an accountant, owner or leaseholder instigates the process of identification i.e. a room by room survey, with the appropriate costing of these qualifying items, they will remain unclaimed and a potentially substantial benefit to the client will remain hidden.
Who can claim the benefit?
The tax benefit is available to the individual, company or partnership that incurred the relevant expenditure or purchased the property.
How is the tax benefit claimed?
The claim is used to generate a tax refund where possible and is used as a tax credit to reduce future tax liabilities. Capital Allowance Review Service ensures the tax benefit is incorporated in the most efficient way for the Client’s circumstance.
As part of our comprehensive service, once we have highlighted the unclaimed capital allowances, we request any available tax repayments from HMRC. Capital Allowance Review Service submits the request to HMRC on behalf of the Client and provides support for a further 12 months.
Could you be missing a trick?
Businesses don’t fully appreciate what constitutes plant and machinery and can spend a significant amount of capital without documenting it, not knowing that the spend could qualify for a tax benefit. Lack of this recorded detail results in tax returns being submitted incorrectly and no claim being made.
Good bookkeeping is important to make sure that the expenditure detail is included in the tax return, applying the correct capital allowance treatment accordingly.
Movable Items include
PCs and Workstations
Immovable Embedded Items include
Health & Safety
The benefit of Capital Allowances is misunderstood and businesses are missing out on tax relief that they’re entitled to. The Illustrative Savings Chart is an example of the amount of tax relief that could be secured.