Capital Allowances

Capital allowances are an important and effective way of reducing your Corporation Tax liability and can be claimed when capital expenditure is incurred on business assets.

Until 31 March 2023 there are enhanced super-deductions and First Year Allowances which means there has never been a more important time to consider how to maximise your claims.

How can we help?

SUPER-DEDUCTIONS AND FIRST YEAR ALLOWANCES

There is a limited window of opportunity to claim these enhanced allowances for qualifying expenditure between 1 April 2021 and 31 March 2023.  We can help you identify qualifying items and ensure claims are submitted to HMRC to maximise the benefits from this temporary regime.

CAPITAL ALLOWANCES CLAIMS AS PART OF YOUR TAX RETURN PROCESS

For any capital expenditure you incur, an analysis should be undertaken and we can prepare a capital allowances claim for inclusion within your tax return. The format of your claim and the work carried out is always tailored to the size and nature of your claim.

LARGER CAPEX PROJECTS

For larger projects we offer a bespoke service that typically involves preparing claims in real time and developing a Capital Allowances categorisation system to ease the preparation of claims and that can be used across multiple projects and across multiple tax years.  We will visit your sites and work closely with your Quantity Surveyors, contractors and project teams as we recognise that these are the key people to bring your project to life and help maximise claims. 

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PROPERTY INVESTORS FROM OUTSIDE THE UK

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Since 1 April 2020 non-resident property investors have been within the charge to corporation tax and it is important that capital allowances are considered in order to deliver significant tax savings.  When constructing, altering or refurbishing a commercial building a significant amount of the expenditure incurred will likely qualify for capital allowances.

HISTORIC CAPITAL ALLOWANCE CLAIMS ON A PROPERTY PURCHASE

If you own commercial properties and have done so for a number of years you could be sitting on a significant amount of unclaimed tax savings.

Our specialists can assess these allowances and submit a claim to HMRC in a clear, approved format.

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STRUCTURES AND BUILDINGS ALLOWANCE

From 29 October 2018, businesses have been able to claim the new Structures and Buildings Allowance (SBA) on qualifying construction costs. These costs do not qualify for capital allowances and would previously have not attracted tax relief.  The SBA currently provides a 3% writing down allowance per annum.

When reviewing your costs for capital allowance purposes, we will also review the eligibility for claiming the SBA and will look to maximise all claims.

LAND REMEDIATION RELIEF

Companies can claim 150% tax relief on qualifying costs incurred on remediation of contaminated land. We will carry out a review of the works completed to ensure that they qualify for the relief and make sure that invoices are sufficiently detailed so that we can maximise your claim.

If companies are loss making, these losses can be surrendered for a repayable tax credit.

BUYING AND SELLING PROPERTIES

Since the pooling requirement came into effect in 2014, allowances in a property must be pooled if the new owner is to be able to make a claim in the future. This is important for those buying properties of course, but also for those selling as it could drastically reduce the price that a future buyer is willing to pay.

When a property is sold, any fixtures in the property must have a value attributed to them. If no work is done to arrive at that value, often a nil value is entered into the box on the relevant forms.

We like to work proactively with clients who are looking to buy or sell a property to ensure that the correct value is attributed. Often, this will involve a historic capital allowance claim. We then work with our client, whether they be the buyer or the seller, to ensure that the correct value is attributed so as to negotiate the best starting point with the other party.


CONTACT MENZIES CAPITAL ALLOWANCES SPECIALISTS
















Service head

Natasha Spicer - ACA

Senior Manager

Natasha Spicer is a Senior Manager in Menzies Farnborough office specialising in business tax advisory services for SME businesses in the UK.