All You Need To Know About Capital Allowances

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All You Need To Know About Tax Planning

capital allowance

Through capital allowances, you may be able to reduce the after-tax cost of your company’s capital expenditure.

Capital allowances are generally the only form of tax relief against capital expenditure. 

Capital allowances compensate for depreciation not normally being deductible for tax purposes.

Capital allowance relief can be claimed on some of the costs of acquisition of commercial property, whether it’s located in the UK or abroad, providing the property is owned by a UK tax payer. 

Capital allowance relief can also be claimed on capital expenditure on fixtures and fittings in commercial property held as an investment or by an owner/occupier.

Capital allowances apply whether you own the property as an investment, or it’s used in your trading business.

Capital allowance relief is available for commercial property of all descriptions, including apart-hotels and most student accommodation.  It also applies to furnished holiday lets in the UK and the European Economic Area, providing the property is owned by a UK tax payer.

Unfortunately, capital allowance relief isn’t available for any form of residential property, such as buy-to-let or HMO property.

Most business trading styles may be eligible for capital allowance relief.  This includes trading as an individual, a partnership, a company, a trustee, or an overseas investor affected by the non-resident landlord scheme.

Because the opportunity to claim capital allowances is so wide, many businesses fail to claim their full capital allowance entitlement.  This includes many businesses that employ some of the largest accountancy firms in the UK!

Time and again, a qualified capital allowance specialist can unearth some surprisingly large capital allowance claims that were inadvertently missed.

So even if your accountant has submitted a capital allowance claim, an 'historic purchase and capital expenditure audit' could well identify further capital allowance opportunities to reduce your business tax.

A capital allowance audit is always done in conjunction with your accountant to ensure you maximise the opportunity to save tax. 

And best of all, your capital allowance audit is undertaken on a no-win, no-fee basis, with the specialist only receiving payment as a tiny percentage of the capital allowance savings they find.

It’s a genuine opportunity to find out how much tax you could save, without you risking a single penny.

Recent Additional Capital Allowance Claims Identified After The Accountants Had Completed Their Work

Public House

Purchase: £705,000
Capital Allowances: £200,000

Wedding Venue

Purchase: £2.38 million
Capital Allowances: £388,000

Office Building

Purchase: £1.1 million
Capital Allowances: £285,000

Golf Course

Improvement: £170,000
Capital Allowances: £37,000

House To Office

Conversion: £5.1 million
Capital Allowances: £740,000

House to Office

Development: £25 million
Capital Allowances: £8.8 million

Office Refurbishment

Expenditure: £1.18 million
Capital Allowances: £705,000

City Office

Purchase: £20 million
Capital Allowances: £5.39 million

5 Star London Hotel

Purchase: £115 million
Capital Allowances: £30 million

Request Your FREE Capital Allowance Audit Now

To qualify for your free Capital Allowance audit, you need to meet all of the following criteria:

  • Your business must pay tax in the UK.
  • It must be making sufficient profits to have paid or be expected to pay Income Tax or Corporation Tax.
  • It must be an owner-occupier or property investor.
  • The commercial property purchased should be at least £500,000 and/or refurbishment expenditure of at least £200,000.

To speak with a capital allowance expert about your free commercial property capital allowance audit, please complete the form below.  Your conversation will be without charge and without any commitment to go ahead. 

The Financial Conduct Authority does not regulate taxation advice.

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