Property capital allowances

Who are we?

We are specialized tax professionals with deep expertise in unleashing hidden tax advantage for commercial property owners via Property Capital Allowances.

Why do Capital Allowances reduce tax?

When you buy, lease or improve a commercial property, HMRC allows you to use some of that expenditure to reduce tax.  Our Capital Allowances audits enable our clients to obtain a tax benefit that could exceed 10% of the property purchase price, often five or six figure sums.

Every building automatically has potentially claimable allowances.  Therefore, any commercial property owner, especially small to medium sized properties, regardless of whether they use the property directly or are commercial landlords, should consider contacting us. Health centres, offices, shops, surgeries, nurseries, restaurants, industrial, anything. We also act for owners of residential blocks of flats or very large residential properties with 7 or more rooms.

What is the process?

We start with a 5 minute telephone interview covering a basic fact find. After this, we can provide a free feasibility assessment and a fee quotation.

We audit all the property-related fixed assets and so far without fail identify tax advantage.


Why is it available?

Accountants can’t be blamed that they have not maximised capital allowances for their clients. “Building works” typically don’t qualify for a tax write down (as buildings in themselves don’t qualify) so the natural tendency is NOT to claim these hidden qualifying tax deductions. In addition, there are around 500 pages of legislation so this is unsurprising.

…BUT Plant & Machinery does qualify …. This includes electrical wiring, plumbing, lighting, kitchens and bathrooms and a further lengthy list.

Usually there is a lack of information and, as accountants aren’t mind readers, nor are they surveyors, they won’t know what proportion of a building or building works are qualifying expenditure. The safest option for them is not to claim.


Who Qualifies?

Clients need to

i) pay UK tax (as a company, a trust or an individual)

ii) own or lease a commercial property (e.g. retail unit, serviced office, industrial unit, hotel etc) including 7+ room let domestic property

iii) the property must not be treated as trading stock (e.g. property developers)


What Qualifies?

When identifying qualifying assets, we carry out the following tests:

• The durability of the asset, the ‘functional’ test,  the ‘completeness’ test, the’ business use’ test and the ‘premises’ test.  Case law covers a number of examples of when the same item of Plant qualifies for Capital Allowances in some instances, but not in others.  We need to ensure for example that the item is specifically required for “business use” and isn’t just part of the “setting” of the business.  This grey area requires specialist knowledge which we have.

• We need to establish the history of the fit out.  We have to carry out due diligence in relation to Sections 185 and 187a CAA 2001 prior claims.


Examples of Plant and Machinery that qualify for Capital Allowance claims

Some examples of what may qualify for Capital Allowances include: Air conditioning, Aerials, Baths, Boilers, Burglar alarms, Carpets, CCTV, Central heating, Counters, Dance floors, Demountable partitions, Door closers, Drinking fountains, Dry risers, Ductwork, Electrical sub-stations, Emergency lighting, Escalators, Fans, Fire alarms, Fire extinguishers, Fire protection systems, Floodlighting, Goods lifts, Hand driers, Hoists, Hose reels, Hot water services, Illuminated signs, Intercoms, Kitchen equipment, Lockers, Lighting control systems, Mezzanine floors, Pipework, Pumps, Racking, Radiators, Switchgear, Telephone systems, Toilets

Virtually all commercial buildings contain qualifying plant and machinery.


How much tax is saved?

A typical example could be :

600,000 x 25%  x 40% Tax Rate = £60,000 TAX SAVING

We can often achieve these levels using an apportionment pursuant to s562 CAA2001.



CALL US TODAY ON 020 3291 1943