Capital allowances are a form of tax relief for expenditure incurred on commercial property acquisition, builds and refurbishments. It is available for commercial property investors and UK business owners.
Capital allowances are a form of tax relief given on costs incurred on commercial property acquisition, builds and refurbishments, and is available for commercial property investors and UK business owners. They allow you to claim a portion of their cost against your tax liability, either creating a tax rebate or a tax reduction. Tax relief can range between 5% and 60% of the cost, depending on the nature of the expenditure.
In short, any UK commercial property owner, whether it be a limited company, partnership or individual can claim Capital allowances on commercial property.
Providing you are paying corporation tax, or income tax, and have a qualifying interest in the property then it’s likely you will be able to benefit from Capital allowances tax relief.
There’s no time limit on claiming capital allowances, providing the asset is still owned and used within the qualifying commercial activity. Capital allowances are not given automatically; they must be claimed in a tax return.
It is important to review historical expenditures, as capital allowances can often be missed. Here at Bonham and Brook we can help identify and maximise potential savings.
Whether an item qualifies must be determined by reference to the facts, the nature of the trade, and the function of the item in the trade. A number of conditions / tests must be satisfied. Assets that can often be classed as ‘plant and machinery’ are equipment like computers, office furniture, tools, machinery, etc, i.e. items that you use to keep your business running.
Items of plant and machinery include:
This plant and machinery only became eligible to be claimed upon in April 2008, integral features include;
At Bonham & Brook, our process for claiming capital allowances involves the following steps: