Understanding Capital Allowances
A beneficial tax allowance for commercial property investment and improvement
Capital allowances are a form of tax relief available to businesses. This tax relief allows businesses to deduct the cost of certain capital assets. These can include equipment, machinery, and property renovations, from their taxable profits. In simpler terms, it’s a way to reduce your tax bill by offsetting the cost of investments in your business.
The Oversight Problem
Capital Allowances are often overlooked
Here’s where the problem often arises – many business owners assume that if they’ve purchased an asset, their accountant will automatically claim the capital allowances for it. However, that’s not always the case. Accountants can only claim capital allowances on expenditure details that are provided to them. This information is usually provided via invoices. However, in many cases, items may not have an invoice, and clients do not know that the asset qualifies for tax relief. In turn, they do not make the accountant aware or do not have the correct information. Either way, a significant amount of tax relief could be lost.
Hidden Items
We assess your property closer
Potentially there may be “hidden” items of expenditure that may qualify. For example, there may be an invoice for a new door. Although the door is unlikely to qualify, the door handle and any associated ironmongery will do in most cases. Another example is if a unit is built and there are invoices for wood, glue, and screws. No claim may be apparent, but the wood, glue, and screws may become shelving or a built-in unit, both of which would then qualify for allowances.
Expertise Matters: Our Approach
CARS has a team of experts to hand
Fear not – this is where our expertise comes in. We understand the intricacies of capital allowances inside out. The CARS team includes specialists who know what qualifies for capital allowances and how to maximise your tax savings. Moreover, part of our process involves visiting the property to identify overlooked items.
We Work Alongside Accountants
We work alongside you, so you can support your clients further
Our team have supported many accountants over the years and we have received great feedback regarding the quality service we provide. By partnering with accountants, we can give them a specialist team on hand at no extra cost. Our skillset covers all the necessary areas needed to put together a thorough claim. Including a property law specialist, a tax specialist, a former HMRC inspector, surveyors and valuers.
Read an accountants thoughts on how a partnership helped benefit their firm...
Our Process in Action
Our team works diligently to ensure that no opportunity for tax relief goes unclaimed. We’ll comb through your expenses, and identify eligible assets. Making sure you’re taking full advantage of the capital allowances available to you.
Free Initial Assessment
To start you will have a chat with one of our Directors and our Business Development team. Here we’ll explore your potential claim and gather any necessary information. Following this, our technical team conducts a review of property data, accounting, and tax records. If a claim is viable, we create a tailored illustration demonstrating potential benefits and how they align with your tax strategy. Finally, upon mutual agreement, we provide engagement documents for your signature.
Establish Claim
Our Project Management team oversees case organisation and gathers necessary property and accounting details. Subsequently, they arrange property surveys or collect essential information, providing you with a Survey Report for review. Our technical team then conducts a thorough analysis. In which we apply relevant legislation to ensure the proper treatment of items that do not qualify or have already been addressed by your accountants.
Tax Work (Retrospective Claims)
After the initial stages, our technical team proceeds to allocate capital allowance pools to eligible items. We utilise strategies like Annual Investment Allowance, Full Expensing, and Structures & Buildings Allowances for optimal tax efficiency. Subsequently, we compile your claim summary, assessing the most suitable tax approach. For submission, if adjustments to a tax return are feasible, we handle the process internally, maintaining direct contact with HMRC as necessary. Finally, upon completion of tax procedures, we provide you and your accountant with comprehensive Final Reports.
Benefits of Choosing Us
By entrusting us with a capital allowance claim, you can rest assured that you’re not leaving money on the table. Our proactive approach and attention to detail ensure that you’re getting the most out of your tax deductions. Allowing you to reinvest those savings back into your business. We have over 20 years of experience and we have built our business on word of mouth as we don’t believe in a sales team.
If you would like to have a chat with our team and see how we can support you, please get in touch…
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Our expert team are here to help answer any of your capital allowances questions or enquires you have about your commercial property.