Capital Allowances
Unlock the funding potential in commercial property
What is Capital Allowances Tax Relief for Embedded Fixtures & Fittings?
UK Tax legislation determines, if you own a property that is used for business purposes, you could be entitled to claim a specialist tax relief on the embedded fixtures that were acquired with your building when you purchased it – even if the original fittings have since been repaired or replaced.
Typically, between 25% and 40% of the original purchase price can be reclaimed and qualifying items can include: electrical, heating & water systems, kitchens, bathrooms, carpets etc.
Identifying the value of the qualifying Fixtures requires the specialist skills of both tax and surveying professionals and is not a service provided by generalist accountants. Consequently, most owners are unaware of their ability to claim and are missing out on thousands of pounds!
What property types does it apply to?
Commercial property owners are eligible to claim if they are a company, sole trader or partnership and are either carrying on a trade or a property letting business (including furnished holiday lets in the UK or European Economic Area). Claims can be made for businesses like:
- Offices
- Industrial & Retail Units, Warehouses & Manufacturing Plants
- Hotels, B&B, or Guesthouses
- Holiday Homes or Short-Term Accommodation Lets
- Holiday & Residential Parks
- Hotel
- Pubs & Restaurants, Cafes & Takeaways
- Hairdressers, Barbers & Beauty Salons
- Kennels & Catteries, Equestrian Centres and Farms
- Hairdressers, Barbers & Beauty Salons
Historically, due to the costs involved, embedded Capital Allowances Tax relief has only been claimed by leading UK businesses or large-scale property investors meaning smaller businesses have been largely overlooked, until now.
On average, £25,000 of tax relief is identified per property.
What is involved in the claiming process?
The process to claim capital allowances for embedded fixtures acquired with business properties is relatively straight forward and requires minimum input from property owners or their advisors.
By answering just a few questions, it’s possible to quickly determine if your property is eligible for this tax relief. Once pre-qualified for a claim, a property tax specialist will calculate an estimation of the potential unclaimed allowances and what tax savings this could generate for you. This is later verified by a capital allowances surveyor who would undertake a technical site-visit to ensure your claim is fully maximised.
Once the survey has been completed, a Capital Allowances Valuation Report is prepared to value the building structure, the land and all the qualifying fixtures within the property. This report is sent for approval, either to yourself or your accountant. Once approved, the report is submitted to HMRC.
Making a claim can be broken down into 5 phases:
- Phase 1 – Consultation & Pre-Qualification
- Phase 2 – Validation & Estimation
- Phase 3 – Conduction of a Property Survey
- Phase 4 – Capital Allowances Valuation Report
- Phase 5 – Submission to HMRC
How quick is the process?
The process typically takes 4-6 weeks from instruction to receiving your tax savings and cash refund.
In addition, there is no time limit on when you can make a claim providing you still own the building and the fixtures in the tax year the claim is submitted. Therefore, it does not matter whether the building was purchased a long time ago, or if you sold it up until 2 years ago. You are still eligible to claim even if the property was not originally used for business purposes.
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