Many businesses that own their own property think that they already claim Capital Allowances, but not many claim them to the full extent. In fact, over 90% of commercial properties are said to be unclaimed on, with the tax relief available often being equivalent to over 30% of the building's purchase price.
These potentially huge tax breaks are tied up in the property's plant and machinery fixtures, but what does this mean?
'Machinery' is easily defined, but 'plant' is less so, and encompasses items from door closers and panic bolts to security and air conditioning.
Claiming Capital Allowances is a simple process, provided you know the legislation and related case law. Following an examination of your property and submission of a report to HMRC, a proportion of the money that these fixtures are worth is claimed back against your company's taxable profits.
It is worth remembering that Capital Allowance claims on existing fixtures can only be claimed once in a building's lifetime. It isn't just the value of the fixtures that can be claimed – a proportion of capital expenditure incurred on fees and other incidental costs can be claimed too. In some cases some or all of the VAT can also be claimed. This also applies to refurbishment, alteration, extensions and new installations, and can also include the costs of consultants for the design, project management and installation of the item, plus any specific costs you can attribute.
Properties that work particularly well are Hotels, Bars, Factories, Nursing/Care Homes ,Offices, Dental & Doctors Surgeries and Vets. This will be news to many small businesses for the simple reason that they don't have access to the same expertise that big companies do.
While the financial considerations for identifying, recording and claiming these allowances can seem large, the rewards for doing so are usually more than worth it. If more small businesses start to take advantage of these generous rules, this really could be Britain's Biggest Tax Break. If you own a Commercial Property or work with clients who do.
Please contact Chris Cornell at Pinewood Claims for a FREE review 07985291660.