FINANCE
BY RICK SCHOFIELD , PARTNER rick . schofield @ azets . co . uk
Unlock those important tax savings through capital allowances
CAPITAL ALLOWANCES ARE A VALUABLE FORM OF UK TAX RELIEF . BY MAXIMISING CAPITAL ALLOWANCES CLAIMS , SIGNIFICANT CASH TAX SAVINGS CAN BE SECURED FOR COMMERCIAL PROPERTY EXPENDITURE .
Claims for historical expenditure are possible and , going forward , enhanced tax relief is available through the new ‘ Super ’ allowances introduced for companies in March 2021 .
Who can claim ?
Cash tax savings are available to all companies and individuals , whether they are a UK resident or not . The tax relief identified can be offset against taxable profits if you pay UK corporation tax or UK income tax .
What can businesses claim on ?
Capital allowances are available on expenditure incurred on qualifying assets in all types of commercial property . Here are some examples of the typical projects that our specialist capital allowances team get involved in :
• Major new builds , extensions , fit outs and refurbishments .
• Commercial property acquisitions .
• The purchase and renovation of furnished holiday lets .
• Remediation of contaminated land .
Commercial properties contain elements that qualify for capital allowances such as heating , electrics , plumbing , sanitaryware , fixtures and fittings . Depending on the type of property and work undertaken , up to 30 % - 40 % of the build cost or purchase price can qualify for relief . With alteration and refurbishment projects , this figure can be up to as high as 80 % - 90 % of the total cost .
By accurately identifying expenditure eligible for capital allowances , businesses can effectively reduce the cost of assets and enhance investment returns .
Retrospective claims and deferring relief
It ’ s important to note that claims can also be processed for historical projects where the following is applicable :
• The business has in the past acquired a commercial property and still owns it .
• The business has in the past incurred significant levels of property expenditure and did not at the time undertake a specialist capital allowances exercise .
Often on major projects a lack of cost information from contractors means valuable allowances are missed . However , capital allowances claims can in fact still be produced where no cost information exists .
Crucially , unclaimed capital allowances can be carried forward in whole or in part . Although , a specialist capital allowances advisor should be contacted to ensure that no enhanced reliefs are missed by doing so .
‘ Super capital allowances ’
Going forward , enhanced tax relief is available through the new ‘ Super capital allowances ’, which was introduced in March 2021 and permits 130 % or 50 % relief for certain qualifying
assets , up until 31 March 2023 . Please contact an Azets advisor to find out more about the ‘ Super capital allowances '.
The regime continues to evolve , and businesses should focus on capital allowances now to ensure tax savings are fully optimised .
Get in touch
The Azets capital allowances team are made up of multidisciplinary specialists that include chartered surveyors , tax advisors and accountants . This means we understand construction and valuation matters , as well as how to interpret necessary case law and complex tax legislation to maximise and accelerate the relief .
For more information or to discuss how to ‘ unlock ’ tax savings through capital allowances , please get in touch with our specialist team today .
Local offices : Ashford : 01233 629 255 / Canterbury : 01227 454 861 Maidstone : 01622 690 666 / Orpington : 01689 827 505 Sandwich : 01304 249 997
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