The Background
What are Property Embedded Fixtures and Fittings (PEFFs)?
Property Embedded Fixtures & Fittings (PEFFs) are a specialist element of the well-known subject of capital allowances.
Due to this specialism, they are often missed during capital allowances claims, resulting in major tax benefits being missed.
Are you missing out on Property Embedded Fixtures and Fittings (PEFFs)
As a matter of course, accountants identify ‘movable’ items which qualify for capital allowances. These obvious movable items such as desks, chairs, computers, cars, etc.
However, many are unaware of the qualifying integral fixtures & fittings embedded within the property that are essential for a business to carry out its trade.
This leaves an enormous amount of unclaimed qualifying ‘immovable’ items on which capital allowances can be claimed. These items can either be inherent within the property at the time of acquisition or that have been subsequently installed.
Why is there an elephant in the room?
It’s important to focus on the words ‘Functionality’ and ‘Embedded’ when it comes to a capital allowance claim.
Due to Plant & Machinery not being defined in law, this is where these claims become tricky as many are not aware of what does and doesn’t qualify; therefore, they’re often misled into thinking they have claimed all the tax relief available to them.
Our expertise adds value to the work of a good but non-specialist accountant. Accountants will do a thorough job of claiming the capital allowances available through the invoiced expenditure passed to them, however, that paper trail is as far as they can go.
We implement a process that digs deeper and discovers more through a site survey which reveals items embedded within the building that are not accompanied by an invoice.
Everything you need to know about PEFFs
-
Why are embedded fixtures and fittings missed?
Until an accountant, owner or leaseholder instigates the process of identification i.e. a room by room survey, with the appropriate costing of these qualifying items, they will remain unclaimed and a potentially substantial benefit to the client will remain hidden.
-
Who can claim the benefit?
The tax benefit is available to the individual, company or partnership that incurred the relevant expenditure or purchased the property.
-
How is the tax benefit claimed?
The claim is used to generate a tax refund where possible and is used as a tax credit to reduce future tax liabilities. Capital Allowance Review Service ensures the tax benefit is incorporated in the most efficient way for the Client’s circumstance.
As part of our comprehensive service, once we have highlighted the unclaimed capital allowances, we request any available tax repayments from HMRC. Capital Allowance Review Service submits the request to HMRC on behalf of the Client and provides support for a further 12 months.
Could you be missing a trick?
Businesses don’t fully appreciate what constitutes plant and machinery and can spend a significant amount of capital without documenting it, not knowing that the spend could qualify for a tax benefit. Lack of this recorded detail results in tax returns being submitted incorrectly and no claim being made.
Good bookkeeping is important to make sure that the expenditure detail is included in the tax return, applying the correct capital allowance treatment accordingly.
Movable Items include
-
PCs and Workstations
-
Furniture
-
Furnishings
-
Much More...
Immovable Embedded Items include
-
Heating Systems
-
Electrical Systems
-
Health & Safety
-
Much more...
Take a look at PEFFs in action...
Illustrative Savings
The benefit of Capital Allowances is misunderstood and businesses are missing out on tax relief that they’re entitled to. The Illustrative Savings Chart is an example of the amount of tax relief that could be secured.
