Capital Allowances

VALUABLE TAX RELIEF FOR CAPITAL EXPENDITURE

Capital allowances are a way of obtaining tax relief on capital expenditure. This is valuable to your business since accounts depreciation is not tax deductible.

The allowances are treated as a tax-deductible expense and thus reduce taxable profits.

Capital allowances are not just available against capital expenditure incurred from the date your business starts. Capital expenditure incurred prior to your business starting may also qualify for tax relief.

Capital allowances offer very significant tax savings, but the process is complex and technical. We make your life easy by managing your case from start to finish. We apply our expertise to ensure you obtain the maximum tax relief available on your capital expenditure.

WHAT QUALIFIES?

Capital allowances can be claimed by sole traders, partnerships and companies. Capital allowances are a HMRC endorsed form of tax relief. 

Capital allowances are typically available for: 

  • equipment (e.g. computers, telecommunications, printers)
  • integral features (e.g. air conditioning, electrical wiring)
  • furniture
  • machinery
  • vehicles

But are also available on a range of other items and features which are often overlooked by business and their advisers when identifying capital allowances.

FOR EXAMPLE...

A client purchased an office building five years ago for £1 million, and had one of the top 10 UK tax practice as his tax advisors. 

Signature Tax contacted this client as part of a free tax health check to confirm that the client was paying the correct amount of tax. After carrying out a due diligence report into the property history, we determined that the client was eligible to make a capital allowances claim. 

We prepared a report suitable for submission to HMRC and worked closely with the client’s accountants to identify £310,000 of capital allowances, which generated a tax repayment for the client. 

The well-established tax advisers had missed this opportunity and Signature Tax saved the client - a higher rate taxpayer (at the 40% rate) - in excess of £120,000.

PROPERTY TYPES & APPROXIMATE VALUE OF CAPITAL ALLOWANCES

The following provides an estimate of the percentage of a property’s acquisition value which qualifies for capital allowances.

Property Type - Value:

  • Bank - 20%
  • Caravan Park - 60%
  • Car Showroom- 15%
  • Care/Nursing Home - 25%
  • Community Centre - 15%
  • Dental Surgery - 25%
  • Distribution Centre - 15%
  • Hotel - 25%
  • Industrial - 12%
  • Industrial with Office - 15%
  • Medical Centre - 25%
  • Multi-Storey Car Park - 10%
  • Nursery - 20%
  • Office - 20%
  • Petrol Station - 15%
  • Public House - 18%
  • Research Facility - 30%
  • Restaurant - 20%
  • Retail/Shop - 12%
  • Shopping Centre - 15%
  • Sports Centres - 20%
  • Student Residence - 15%
  • Theatre - 20%
  • Veterinary Surgery - 25%

 

MAKE AN APPOINTMENT

If you are interested in finding out more, and would like to make a consultation with one of our specialists, please complete the below form, or call us on 0161 850 0648. 

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