Planning to buy, build, extend or refurbish?
You may qualify for a reduction in your annual tax bill
What are capital allowances?
Quite simply, capital allowances can reduce your annual tax bill. They can be claimed for some types of capital expenditure but, generally speaking, anything that is used for a business purpose that has a useful life of two or more years may qualify.
They are treated like any other expense and can be deducted from your profits or added to a loss when calculating your taxable profits at the end of the financial year. The deductions recognise that assets and equipment can lose value as a result of general usage and wear and tear. In other words, capital allowances are the tax equivalent of depreciation.
What type of assets qualify?
There are a wide range of qualifying assets. In terms of equipment, this could include computers, office furniture, dental chairs, computer aided machinery, space and water heating systems, air conditioning, lighting and more. It is often the case that embedded fixtures are not valued separately resulting in qualifying items remaining unclaimed. In some circumstances, we will recommend that a survey of your property is carried out to ensure that all qualifying items are picked up and included in the claim. Even the commercial building itself can, in certain situations, qualify for tax relief.
Assess, identify and recommend
We’ll meet with you to discuss your potential capital allowances claim and how we can help. We will review your capital expenditure and capital assets to identify potential current and historic claims. You will then receive our recommendation on which assets are likely to qualify for tax relief and we will make you aware of any follow-on impacts on your current tax position.
Your claim, HMRC and cost
We’ll help you to complete the claim and submit it to HMRC on your behalf, ensuring that the benefit of any tax relief is obtained at the earliest opportunity. If any queries arise, we will discuss these with HMRC on your behalf. We can provide you with a fixed fee at the outset of the assignment. We may also need to instruct a full survey of any property to uncover all qualifying plant and machinery and integral items. We will discuss this with you at the initial meeting.
If you are planning to invest in any equipment, give us a call and we will give you an indication on whether your investment is likely to qualify. Similarly, if you are planning to buy, build, extend, refurbish or sell commercial property it is worth a call to us to discuss what may qualify before you begin the project.
Jayne Clifford
Martin Aitken
Tel: 0141 272 0000
Email: jfc@maco.co.uk
For more information visit Martin Aitken online.