The Capital Allowances system allows a business to write off the cost of certain capital assets against taxable income. This is well known, and allowances for machinery, plant and business equipment are commonly claimed. The majority of business owners are not aware that there may be allowances “embedded” within the fabric of their building that could give rise to a benefit totalling 25% of the value of the property.
These are items that are attached or embedded in the property and may have been in the building when it was purchased. They are integral features such as entry and exit systems, doors, shutters, bathroom facilities and such like. Embedded Allowances are commonly found in hotels, guest houses, holiday lets, care homes, dentists and veterinary surgeries. Office & retail premises and industrial units & warehouses can also hold worthwhile Embedded Allowances if the buildings are of a reasonable value.
For a commercial property worth £1 million this could rise to a previously unknown benefit of £150,000. What would that mean to you and your business?
The system for claiming Embedded Capital Allowances is as technical as it is complicated but when you work with Rufus & George – Tax that is our problem, not yours. We use partners with deep experience in the sector to manage and process claims so that you can concentrate on your business.
The process is straightforward and usually take 8 weeks from start to finish. It usually runs as follows:
- A short meeting with a partner from Rufus & George. The goal is to gather information about your business and your commercial property and to talk you through the process.
- We then make contact with your accountant and request the required information regarding the property. This information will be used to establish whether there is a basis for a claim.
- Once this has been established, a surveyor is sent to your property to gather information to enable a specialist tax accountant to produce a detailed report which is submitted to HMRC outlining the nature and level of a claim.
- If HMRC agrees with the claim they will make a payment. A fee is only charged if the claim is successful.
You may think that your accountant should be to assist you but in most cases this is not a reasonable expectation. It is a deeply technical process and requires a high level of understanding of what can be claimed and what HMRC want to see and hear in a claim.
The Small Print
- “Embedded ” items are items considered to be integral to the property such as entry and exit systems, doors, shutters, bathroom facilities and such like.
- Any owner of a commercial property can claim allowances as long as the property is owned on a Freehold and it is owned by the business or its owners and not a pension fund or similar.
- An embedded capital allowance can be claimed at any time that the property remains in your ownership.
- There is no time limit for claiming allowances on property purchased before April 2012 but new rules have imposed limits on property bought or built since April 2014. It this describes your situation get in touch right away.