Firstly, what are capital allowances?
Capital allowances are a taxable benefit against capital expenditure on commercial property.
The ability to claim capital allowances is dependent on the type of expenditure, and what qualifying items are included in the expenditure, which may include existing items in a property purchased by a previous owner. Qualifying allowances are available to an individual, a partnership, and a limited company provided there is a liability to UK tax against profits.
Different kinds of capital allowance for offices
-
Purchase of a property
If a business, or individuals, have purchased a commercial property, then the likelihood is that capital allowances will be claimable. Allowances may be claimable in respect of items in the property at the time of purchase, subject to these items having not been claimed by the previous owner, and will almost certainly be claimable on any improvement costs after purchase.
-
PEFFs
Property Embedded Fixtures and Fittings or PEFFs for short, are the plant, machinery and fixtures which are embedded in a building. This type of fixtures and fittings relates to anything which is fixed, nailed or bricked into the building. Examples are radiators, lighting, ironmongery to doors and windows, and lifts.
At Capital Allowance Review Service (CARS), we explain PEFFs as… ‘if you tipped the building upside down, everything that remains in the building could qualify for tax relief, when we consider how these items allow the business to trade from that building’.
-
SBA
Structures and Buildings Allowance relates to the renovation or the building of a structure for which you paid the cost. You can claim costs which include the preparation of the site, construction works, renovations, and the fitting out works. If you bought the structure from a developer, you can claim SBA on the price you paid the developer.
How do I claim
Capital allowances are claimed in your tax return.
They can be claimed in an “open” tax return, which will be your current tax return, and usually the one previously submitted. Claims for capital allowances are not time-barred in many situations, so for example if the items were purchased (say) 20 years ago, that does not necessarily mean that allowances cannot still be claimed.
Want to know more?
Capital Allowance Review Service (CARS) is a tax specialist on capital allowances. Our team has over 20 years of experience and we have a 100% success rate. Our team of skilled individuals with work with you at every stage of the process. We will deal with all aspects of the claim, from the initial assessment to submitting the claim to HMRC.
Latest News
-
21 March 2023Can holiday caravan parks qualify for capital allowances?
Can holiday caravan parks qualify for capital allowances? Yes, of course. The activity of a holiday caravan park is a qualifying trade, for the purpose of claiming capital allowances. Other allowances such as Annual Investment Allowance (AIA), Structures and Buildings Allowance (SBA), Super-deduction,... -
21 March 2023
Capital Allowance considerations when selling a commercial property
If you’re planning on selling a commercial property, it’s important to understand the capital allowance considerations involved in the process. Capital allowances are essentially tax relief available to UK taxpayers. These are available when there is an investment in qualifying assets, such...
Contact Us
Our expert team are here to help answer any of your capital allowances questions or enquires you have about your commercial property.