Capital allowances

Reviewing your capital allowance claims could allow you to save on the tax bill of your commercial property purchases or renovations. 

Tax relief can come from several sources. From the purchase of the property itself, right down to more specific jobs, such as installing a new air conditioning system, there are a number of ways to claim capital allowances.

Who can claim capital allowances?

If you own a commercial property and pay tax in the UK, you’re entitled to a capital allowance claim on qualifying fixtures in your properties. Capital allowance claims apply whether you own the property as an investment or use it in your trading business. 

What are capital allowance property claims?

Qualifying expenditure can come from:

• the acquisition of a building;
• the construction of a new building;
• the extension, alteration or refurbishment of an existing building; and
• leasehold improvements to a rented property.
  

To qualify, you’ll need to have spent money on:

• lighting and electrical systems;
• air conditioning;
• heating; or
• sanitary ware.

What are common capital allowance claims myths?

We explore, and debunk, some of those key myths on our capital allowances myth-busting page.

When can capital allowances be claimed?

The timing for when you can claim UK capital allowances will depend on your circumstances, but there is no time limit once you’ve purchased a property. We have more information about this in our article on capital allowance myths.

How are capital allowances calculated?

The amount of capital allowances tax relief available is dependent on the type of expenditure incurred. The tax relief can vary from 100 per cent relief for, for example, electric vehicle charging points, to 6 % for expenditure on a new lighting system. It is important to involve a specialist capital allowance advisor in the computation of the allowances available to ensure that you claim all the relief you are entitled to in the correct timescale.

Can capital allowances be carried forward?

Any unclaimed capital allowances can be carried forward indefinitely and used against your business’s future profits.

Capital Expenditure Review Technology (CERT)

We’ve developed Capital Expenditure Review Technology (CERT) that can analyse large volumes of fixed asset data at the touch of a button.

CERT allows us to tailor your requirements to sector specifications and replicate the results for past and future years.

To find out more, watch our video or get in touch with one of our experienced team.

How can RSM help with your capital allowance claims?

Many advisers only carry out a high-level analysis or review, which pick out obvious fixtures and fittings that are eligible for capital allowances.

At RSM, we take a more detailed and forensic approach to identifying capital allowance property claims. We use qualified surveyors and carry out a full assessment of the fixtures included in the fabric of a building. We can quickly identify the likelihood and broad potential value of a claim, allowing us to agree flexible fee arrangements upfront. In many cases, we can make claims for previous periods – giving you an immediate tax refund as well as future savings.

Get in touch with our Capital Allowances experts to find out more.