Many businesses are missing out on millions of pounds of tax allowances and you could be among them. It’s estimated that the majority of owners of commercial properties haven’t claimed because the dormant tax benefit in embedded fixtures is often overlooked.
In addition, changes in the Finance Act from April 2014 also mean that tax allowances for commercial building fixtures could be lost to a new buyer and all future owners. You may not have heard about this property relief because it requires a specialist surveyor and tax expert to review your buildings and books.
What is a Commercial property, Offices, Factory Unit, Hotel, B&B, School, HMO, Holiday let, any building that is NOT a residential property.
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Commercial Property Owners
Capital allowances are an important tax benefit for commercial property owners. For a typical business, a specialist capital allowance consultant will be able to identify capital allowances of around 20-25% of the base cost of the property, bringing a tax benefit worth tens of thousands of pounds, even to smaller businesses.
Professional accountants and financial directors will, of course, be well aware of the importance of this tax benefit and may already be working with their clients to claim it. There is, however, a strong case for employing specialist consultants to maximise claims, especially when the new rules make it so easy to lose entitlement altogether.
A good accountant or other business adviser will take companies through a comprehensive assessment of what they can claim with the aim of identifying all possible capital allowances and maximising their client’s tax benefit. However, a good capital allowances expert will probe even deeper, finding previously undiscovered and imagined items of allowable capital, embedded deep within the business.
For most accountants, a review normally begins and ends by analysing invoices and following a paper trail. A capital allowance expert will visit the property in person and identify items that have not been captured in any paperwork. In this way, a capital allowance expert adds value to the work already done by a good, but non-specialist, accountant.
The list of allowable items is vast, so here are just a few of the ways in which a specialist capital allowance expert can help:
An accountant will count up a company’s PCs, servers and printers as allowable items, since these are essential to running the business. A capital allowance expert will look further to include the floor boxes embedded in the building structure, which provide power, network sockets and phone points, all equally essential to the business. An accountant will know how to value a hotel’s furniture and soft furnishings. A capital allowance expert will know to include all those items that are integral to the building which also contribute to the business, such as those relating to thermal insulation (including radiators) and fire safety (such as smoke alarms and fire extinguishers) and, in certain circumstances, those that help to create atmosphere and ambience. An accountant will take into account all gym and exercise equipment in a sports centre. A capital allowance expert will look further to include items such as anti-slip or soft impact floor surfaces, integral to the building but nevertheless essential for this type of business and part of the cost of providing safe services.