Are you sitting on unclaimed Tax Relief?
Are you a commercial property owner? If so, you may be unaware that you are eligible for tax relief on your property by way of Capital Allowances.
What are Capital Allowances?
Capital Allowances are a tax incentive designed to stimulate investment in commercial property and plant and machinery. In simple terms, they help reduce tax liabilities and increase cash flow.
Whether you already own a commercial property or are in the process of purchasing one, capital allowances can be claimed in the current year of purchase or retrospectively with no time limit.
What attracts the tax relief?
There are a number of existing embedded items within every building which attract capital allowances, but they can be difficult to quantify, as they lie behind walls or under the floor boards. These items include wiring, pipe work, lighting, heating, fire and security systems, sanitation and so on, the list is endless. On average these items of plant and machinery account for around 20 - 40% of the purchase price of the property. In order to identify these items you would need a specialist capital allowances surveyor to identify the embedded tax relief.
The latest survey undertaken by the law society has shown that over 93% of UK commercial property owners are missing out on average of £40,000 in valuable tax relief because they have not completed a Capital Allowances exercise on their property.
Capital allowances are available when:
Commercial property is acquired for investment or occupation
Commercial new-build, extension or fitting-out/refurbishment works are undertaken
Business equipment is purchased
Business pays UK tax (income tax or corporation tax)
A capital sum has been paid for the property
*Capital allowances cannot be claimed if the property is owned by a pension fund, developer, local authority or charity.
Utilising capital allowances is a great way to reduce tax liabilities and increase cash flow and is one of the government’s key tax concessions for small to medium sized businesses. If you own, or are looking to purchase commercial property then capital allowances should be on the top of your list to save your business money.