Businesses receive tax relief on their capital expenditure (new machines, computers and commercial vehicles) by claiming capital allowances.
How much you can claim depends entirely on the nature of the asset you are investing in, and to add to the complexity, the rates and allowances invariably change each year in the Budget.
There are various categories of asset which qualify and each category comes with its own set of conditions, allowances and rates. There are also special allowances to stimulate investment in deprived areas called Enterprise Zones.
We will discuss your capital expenditure plans with you, as timing capital expenditure around the company’s year-end may maximise utilisation of the company’s annual investment allowance (a highly attractive rate of capital allowances). We will review your capital expenditure and make sure that it is categorised correctly and your capital allowances are maximised. We can then consider how much of those allowances are going to be claimed that year, making sure that your capital allowances are protected and not wasted.
Capital allowances on property transactions are complex and often overlooked. The buildings themselves do not usually qualify for capital allowances, but the plant and machinery (including lifts, air conditioning systems, sanitary ware, heating, lighting and solar systems) within the building does. The value of such capital allowances can be very substantial indeed.
If you are buying a commercial property it is paramount that we determine the seller’s capital allowance position as early as possible. You will both need to make elections and take certain steps to preserve the capital allowances, otherwise these valuable allowances will effectively be lost so that they cannot be claimed by anyone.
