Nearly all UK businesses incur expenditure on freehold or leasehold properties and should seek to claim capital allowances on this expenditure. It's common for capital allowances claims to be either underclaimed or completely overlooked. Businesses may not even be aware that such allowances were available.
Even those who believe claims have been maximised might be pleasantly surprised by a typical uplift of between 10% and 20% that can be found by specialists. In our experience this relief is being underclaimed in many cases. Our checklist below outlines some of the common areas where capital allowances relief can be found and improvements made.
1 Underclaimed or overlooked claims are often due to a lack of construction cost of purchase information. Breaking down those costs can unlock additional elements for relief and improve the overall levels of claims.
2 Ensure you are claiming for all associated costs, such as preliminaries, professional fees and contributions for fit outs and other works.
3 The purchase of second-hand property can unlock opportunities for capital allowances claims. This is the case even if there's a Section 198 election in place to fix the level of capital allowances transferring as part of the transaction. These are just some of the scenarios where additional claims can be made:
4 Don’t assume that your accountant has claimed your allowance in full – not all advisers have access to capital allowances specialists.
5 Many think they can only claim capital allowances in the year that expenditure is incurred. This isn't the case, and if qualifying assets are still owned, a claim could be made. There are very few time limits in claiming these tax reliefs – for example, we review up to 15 years of historic expenditure to identify additional allowances.
If you have any questions arising from this insight or need help with your claims, please contact Jeremy Chapman.