Capital Allowances

Since introduction of the 2001 Capital Allowances Act, commercial property owners have had the potential to claim income/corporation tax relief for certain qualifying items in the building regardless of whether they installed the item themselves. These items include heating systems, lighting, fire doors, flooring, suspended ceilings, kitchens, bathrooms etc. Basically, anything that would remain in the building if you tipped it upside down.

It is important to be able to identify and value these items in the property to make a claim and generate the tax refunds and future relief. On average we will find 20% or more of the property purchase price in capital allowances.

This service isn’t possible for a general accountant as the building needs to be surveyed and is the reason why specialist capital allowance firms exist.

When you sell or purchase a commercial property there is an obligation to accurately complete a form S198 (Freehold), S199 (Leasehold) to reflect the capital allowance position. Is the seller retaining the allowances for themselves, are they passing them to the buyer, or maybe they haven’t made a claim in the past and so the buyer is free to claim but must do so within the two-year claim deadline.

What is the potential financial benefit?

Here is an example of a recent capital allowance claim.

Hotel purchased for £2.5 million

Capital Allowances identified and claimed £900,000

Total tax relief of £360,000 for 40% taxpaying client.

Act now

Due to a recent change in legislation, capital allowance claims need to be made in a timely manner otherwise the opportunity to claim could be missed.

By using the award-winning capital allowance firm, HMA Tax, with their dedicated team who have experience of over 5,500 claims and a 100% claims success rate, we ensure our clients get the best advice in this area. If you would like to know more please contact us or contact the HMA Tax team directly on 01384 904090 and ask for Andy or Karmen.