Capital Allowances Specialists Won’t Leave Money on The Table!

Tax relief

After many, many years in the capital allowances industry we still come across property investors, users and owner occupiers that haven’t claimed capital allowances.  Most not knowing a capital allowances specialist even exists.  

Many often assume, rightly or wrongly, that their accountant or tax advisor claims the capital allowances due on their expenditure.  Some clients may inquire if their accountant claims allowances, and will have this question confirmed positively stating that they have utilised all eligible allowances. However, this may not always be the complete picture.

An accountant usually relies on a desktop invoice review to claim allowances. Yet, the accounting systems may not have the sophistication to analyse lump sums when invoices lack specific details. On the other hand, a capital allowances specialist surveyor can conduct an on-site visit to accurately assess and determine costs eligible for capital allowances from these lump sums.

Typically, accounting systems categorise fixed assets into one of three separate accounts based on their types. Usually, Furniture, Fittings, and Equipment (FF&E) which encompasses movable items like furniture, computer equipment, portable tools, and trade-specific gear. Whilst building additions, eg extensions or refurbishments are classified under freehold land and buildings or leasehold improvements. Accounting systems often fully account for the capital allowances for the FF&E assets, as this tends to be easily picked up from invoices obtained for the item purchase. These could be items like computer equipment, desks and printers, as these are clearly used in the trade and qualifying.

However, in certain instances the tax relief for freehold buildings or leasehold improvements is often not fully maximised.When a property is purchased, fixtures that are attached to the property and that are included in the purchase price often go unclaimed. Typically items integral to the property or are specific to the trade eg ambient features, sprung floors, central heating or toilets. Where an existing property is being refurbished, “builders work in connection” costs associated with installing a qualifying item in that existing building are often missed. A specialist will be able to extract these costs for invoices, itemise and give them an appropriate value based on their knowledge of construction pathology and costs.

Our attached guide outlines why you could be leaving money on the table in the form of valuable tax relief with capital allowances on plant and machinery and integral features.