Businesses receive tax relief on their capital expenditure by claiming capital allowances.
How much you can claim depends entirely on the nature of the asset you are investing in, and to add to the complexity, the rates and allowances invariably change each year in the Budget.
what sort of assets qualify?
There are various categories of asset which qualify, including:
- general plant and machinery, including vans
- short life assets
- energy saving and environmentally efficient assets
- integral features in a building.
Each category comes with its own set of conditions, allowances and rates, and you’ll find a useful factsheet setting these out in the resources section of our website. There are also special allowances to stimulate investment in deprived areas called Enterprise Zones.
Each year we will review every item of expenditure for you, and make sure that it’s categorised correctly and your capital allowances are maximised. We’ll then decide how much of those allowances are going to
be claimed that year, making sure that they are protected and not wasted.
Capital allowances on property transactions are quite complex and often overlooked. The buildings themselves don’t usually qualify for capital allowances, but the plant and machinery within the building does. This will typically include:
- air conditioning systems
- sanitary ware
- heating, lighting and solar systems.
The value of such capital allowances can be very substantial indeed.
If you are buying a commercial property it is paramount that we determine the seller’s capital allowance position as early as possible. You will both need to make elections and certain steps must be taken to preserve the capital allowances. Otherwise these valuable allowances will effectively be lost so that they can’t be claimed by anyone.
The team at Mitten Clarke have a great deal of experience in dealing with such property transactions, and our dedicated capital allowances specialists will make sure that we claim the maximum tax relief possible for you.