Get free updates - subscribe to our monthly newsletter Subscribe
Whilst most accountants and many business owners understand about claiming capital allowances on loose plant items such as tables, chairs and fridges, capital allowances are often overlooked on “fixed plant” such as electrical and heating systems.
According to research by Deloitte, 96% of owners have not taken advantage of the available allowances, losing out on an estimated £70bn to £80bn.
From 6 April 2014 (1 April for companies), if you haven’t identified all available allowances before you sell a commercial property, included them in a capital allowances computation and notified HMRC, all allowances are lost forever, for the seller, the buyer and any future buyer. Commercial properties that are sold without capital allowances will be less attractive to a future buyer and will therefore have a depressed value as a result.
Somewhat surprisingly, when these changes were announced as part of the 2012 Finance Act, the Government didn’t set a deadline of April 2014 for all retrospective capital allowances after that date. However, once a property has changed hands after April without the issue being addressed, it will be too late.
As a guide, if a property is worth £1m, there could be £250,000 worth of assets available for tax relief. Over time, this would be worth £100,000 to a 40% income tax payer and at least £50,000 to a company.
If you or your business owns a commercial property and you would like a capital allowances review, please get in touch.
David Robinson, Tax Consultant
If you like this article and would like our FREE updates sent straight to your inbox then subscribe to our monthly newsletterSubscribe
All content © 2015 Armstrong Watson. All Rights Reserved. Website by Simon Pighills.
Armstrong Watson LLP is a limited liability partnership registered in England and Wales, number OC415608. The registered office is 15 Victoria Place, Carlisle, CA1 1EW where a list of members is kept. Armstrong Watson Accountants, Business & Financial Advisers is a trading style of Armstrong Watson LLP. Armstrong Watson LLP is regulated by the Institute of Chartered Accountants in England and Wales for a range of investment business activities.
Armstrong Watson Audit Limited is registered to carry on audit work in the UK and Ireland by the Institute of Chartered Accountants in England and Wales. Registered as a limited company in England and Wales No. 8800970. Registered office: 15 Victoria Place, Carlisle, CA1 1EW
Armstrong Watson Financial Planning Limited is authorised and regulated by the Financial Conduct Authority. Firm reference number 542122. Registered as a limited company in England and Wales No. 7208672. Armstrong Watson Financial Planning & Wealth Management is a trading name of Armstrong Watson Financial Planning Limited. Registered Office: 15 Victoria Place, Carlisle, CA1 1EW