Free money - it almost sounds too good to be true, but if you're within the large proportion of commercial property owners not claiming their full allowances, then this is exactly what you're passing up. Depending on the sector in which you operate, you should expect to be able to discover between 15% and 45% of the purchase or construction cost of the property in previously unclaimed capital allowances. Not a figure to be sniffed at!
Companies can claim these capital allowances on plant and machinery, buildings - including converting space above commercial premises into flats for renting - and research and development. Even better, these claims against freehold property payments can be made retrospectively, which means you can include assets bought up to 15 years ago. If the purchase took place more than 15 years ago, it is usually not worth pursuing owing to problems with obtaining the necessary documentation, but there may be subsequent additions to the property that would qualify.
In addition, if you intend to invest in your commercial property - including a new build, extension or refurbishment - then you can work directly with the architect or quantity surveyor in order to maximise the claim and complete the summary report as promptly as possible. If you're planning remedial or re-fitting work, make sure to notify your accountant in plenty of time before the project start date, so that they can make records before and after, to ensure an accurate report is sent to HMRC.
Your accountant should be able to put together a comprehensive capital allowance review which identifies items that qualify for enhanced tax savings. This is suitable for any tax-paying person, company, LLP or partnership which owns commercial freehold property. Often the charge for this service is a percentage of the tax saved, so if no viable capital allowances can be found, then there will be no cost involved.
However, changes to this legislation have meant that time is now running out for certain claims, so it will quite literally pay to act quickly. Industrial Building Allowances are being phased out, and are to be abolished by April 2011, while writing down allowance rates have been reduced following the March 2007 Budget. But there are still enhanced capital allowances available at 100% for first year allowances on energy efficient plant and machinery, and cars emitting 110g/km of carbon dioxide or less, plus an enhanced rate of 40% first year allowances for expenditure in the 2009/10 tax year.
If you're still not persuaded, have a look at this example. One of our clients had constructed a new head office building measuring 1,351 sq m, consisting of both warehousing and office space, at a cost of £1.7m. We identified £484,523 worth of unclaimed capital allowances which represented potential tax savings of £135,666. Even taking into account our fee (which would not have even been charged if no savings could be made), this represents a significant saving.
So what have you got to lose? Contact your accountant to find out how much you could save.
Companies can claim these capital allowances on plant and machinery, buildings - including converting space above commercial premises into flats for renting - and research and development. Even better, these claims against freehold property payments can be made retrospectively, which means you can include assets bought up to 15 years ago. If the purchase took place more than 15 years ago, it is usually not worth pursuing owing to problems with obtaining the necessary documentation, but there may be subsequent additions to the property that would qualify.
In addition, if you intend to invest in your commercial property - including a new build, extension or refurbishment - then you can work directly with the architect or quantity surveyor in order to maximise the claim and complete the summary report as promptly as possible. If you're planning remedial or re-fitting work, make sure to notify your accountant in plenty of time before the project start date, so that they can make records before and after, to ensure an accurate report is sent to HMRC.
Your accountant should be able to put together a comprehensive capital allowance review which identifies items that qualify for enhanced tax savings. This is suitable for any tax-paying person, company, LLP or partnership which owns commercial freehold property. Often the charge for this service is a percentage of the tax saved, so if no viable capital allowances can be found, then there will be no cost involved.
However, changes to this legislation have meant that time is now running out for certain claims, so it will quite literally pay to act quickly. Industrial Building Allowances are being phased out, and are to be abolished by April 2011, while writing down allowance rates have been reduced following the March 2007 Budget. But there are still enhanced capital allowances available at 100% for first year allowances on energy efficient plant and machinery, and cars emitting 110g/km of carbon dioxide or less, plus an enhanced rate of 40% first year allowances for expenditure in the 2009/10 tax year.
If you're still not persuaded, have a look at this example. One of our clients had constructed a new head office building measuring 1,351 sq m, consisting of both warehousing and office space, at a cost of £1.7m. We identified £484,523 worth of unclaimed capital allowances which represented potential tax savings of £135,666. Even taking into account our fee (which would not have even been charged if no savings could be made), this represents a significant saving.
So what have you got to lose? Contact your accountant to find out how much you could save.
