Who qualifies for Capital Allowances tax relief?

If you are a UK taxpayer and own a commercial property, then there is a very good chance you will be due a sizeable tax benefit because of unused capital allowances.

What can I claim for?

Your accountant will claim for you on everyday purchases such as curtains, computers, fire extinguishers, tables and chairs.

However, the majority of accountants will not have the necessary skillset required to form a ‘just and reasonable’ apportionment of a property’s cost and place values on the qualifying plant within. Such items include electrics, air conditioning, heating systems, lighting, plumbing and sanitary installations.

We, on the other hand, draw on a far more detailed understanding of capital allowances legislation and carry out a detailed on-site survey of the property in question.

We will work with you and your accountant to make sure that absolutely every opportunity for capital allowances tax relief has been identified and claimed for.

What is HMRC’s role?

HM Revenue & Customs created capital allowances legislation to encourage more commercial property investment by individuals and companies.

We would not generally request any information from HMRC to process your claim, and generally find that the required information is more readily available from our clients and their advisors.

Our report has been specifically formatted for HMRC purposes and we believe that this has a large part to play in the fact that historically less than 1% of our cases that have been submitted to HMRC have generated the need for a further enquiry.

Nevertheless, routine enquiries into a capital allowances submission will occur from time to time. In such circumstances, we will answer any queries raised by HMRC and provide all the necessary supporting information and documentation in order to satisfactorily substantiate the claim as we have the expertise and are quite happy to provide this service under the terms of the contract.

Will this affect my capital gains tax or reduce the value of my property?

Not at all. The introduction of capital allowances will not affect the base cost for capital gains tax purposes.

There is a distinction to be drawn between the moveable furniture & equipment (fixtures & fittings) which are separate items to the building and embedded plant & machinery which is fixed to the building. The embedded plant is not removed from the building and therefore not allocated separately in the accounts. The introduction of the capital allowances into the pool(s) is therefore a tax concern and not an accounting consideration. The accounts are not amended; the only change is to the respective pool(s) where the plant & machinery allowances are introduced.

I bought my property 10 years ago. Can I still claim?

Yes, absolutely. We routinely process claims for expenditure incurred 10 years ago or even earlier. The claim can be submitted into the earliest tax return which remains open for amendment under self-assessment rules. Doing so can often result in a rebate of overpaid tax.

It sounds too good to be true. There must be some hidden costs?

There are absolutely no upfront costs. Our fee will only become due once we have completed our work and produced a Capital Allowances Valuation Report that identifies a worthwhile claim.

We work on a ‘no claim, no fee’ basis as we feel it is the fairest way to work with our clients, and have minimum claim thresholds in place. Should we discover that no claim is available, we will close our file and a fee will not be due, regardless of the work undertaken up to that point.

My accountant already deals with our Capital Allowances. Isn’t this something they should have done already?

Most accountants provide some form of capital allowances advice. However, capital allowances claims are ideally suited to being dealt with on a standalone basis separately to other tax matters.

As capital allowances specialists we possess a specific skillset with a more detailed and up-to-date understanding of capital allowances than most advisors, who deal with this area of taxation less frequently.

We are consistently able to identify tax savings which have previously been overlooked by clients and their advisors.

Working alongside your accountants will ensure a positive outcome. Indeed, your accountant will sign off our work before it is submitted to HMRC.

I don’t have sufficient taxable profits to benefit from Capital Allowances. Should I bother with them?

Yes. In our experience, it can still be worthwhile identifying capital allowances, particularly if a taxable profit is expected in the near future.

There are situations in which capital allowances do not yield an immediate return. However, they can sometimes be used to offset capital gains tax liabilities, surrendered to group companies, passed on to new owners and more. Ultimately each set of circumstances is different and we would always recommend getting in touch so that we can carry out an appraisal and provide advice.

Do I qualify?

If you own a limited company that has been trading for more than 12 months and have developed new, or improved existing products, processes, systems, services, devices or materials, then there is a significant chance you will be eligible to claim for Research and Development Tax Relief.

Irrespective of whether your company is currently making a profit or operating at a loss, a claim could still be possible.
If you are still unsure whether you would be eligible for a claim or would like to discuss in more detail how this relates to your business please get in touch on 0300 303 1903.

What can I claim for?

Typical claim items include staff costs, materials, utilities, reimbursed travel costs and sub-contractor costs. As a specialist R&D firm, we have a detailed understanding of Research & Development practice and legislation and will conduct a detailed audit of your business to ensure that every opportunity for Research & Development tax relief is identified.

What is HMRC’s role?

Government created Research & Development legislation as an incentive to encourage businesses that are developing new, or appreciably improving existing, products, processes, systems and materials — and thereby increasing the country’s wealth creation capacity.

HMRC’s regional departments will analyse and check R&D reports and the costs identified.

HM Revenue & Customs are therefore very skilled at processing these claims. Our specialist advisers liaise with them daily, on your behalf, and in the unlikely event of any issues being raised it is part of our commitment to you to resolve these.

Are there any additional costs?

We charge no up-front costs, and should we fail to identify a claim then we will not charge you a fee at all. In other words, we operate on a ‘No Win, No Fee’ basis.

Also, we do not charge for submission fees so there will be no surprises when it comes to your claim being filed with HM Revenue and Customs. We also offer all clients 6-year report protection as part of our service.

Who qualifies for the Patent Box tax relief?

Your company will qualify for relief if:
• You own patents, or
• You own an exclusive licence to exploit a patent
• It’s a UK, specific EEA country or EU patent (& certain other rights)
• There are no other IP – trademarks, designs, copyrights etc.

What can I claim for?

Qualifying income includes:
• Sale of patented items or those that incorporate a patent.
• Licence fees.
• Proceeds from sale of patents.
• Compensation income from infringement of owned rights.

Excluded income
• Income from regular activities (that is income earned regardless of patent rights).
• Income from marketing asset return (that is income earned from branding rather than technological innovation).

What is HMRC’s role?

HM Revenue & Customs (HMRC) created the Patent Box legislation to encourage UK businesses to invest further in innovation.
We would not generally request any information from HMRC to process your claim, and generally find that the required information is more readily available from our clients and their advisers.
Our report has been specifically formatted for HMRC purposes and we believe that this has a large part to play in the fact that historically less than 1% of claims submitted to HMRC have generated the need for a further enquiry.
HMRC are very used to processing these claims. Our specialist advisers liaise with them daily, on your behalf, and in the unlikely event of any issues being raised, it is part of our commitment to you to resolve these at no extra cost.

It sounds too good to be true. Are there any hidden costs?

We charge no up-front fees, and should we fail to identify a claim we will not charge you at all.
We do not charge any submission fees so there will be no surprises when it comes to your claim being filed with HMRC. We also offer all clients 6-year report protection as part of our service.

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