HMRC allow companies to claim tax relief of certain items of capital expenditure. This can include some part of buildings, plant and equipment and vehicles.
The rate at which tax relief can be claimed changes regularly as the Government seeks to encourage business to accelerate investment plans or to invest in certain types of spending.
This can create two situations where businesses lose out on these allowances completely or miss out on the full benefit. Firstly, we see a lot of historic claims missed or not made as the advisors did not realise items could be claimed for or they had no cost allocated to them. In this situation we can recreate the historic cost and apportionments or work with a valuer to agree an historic claim with HMRC. This can result in a tax refund immediately.
The second situation is where businesses are about to invest in assets.
As the allowances that are available and the conditions to claim them change so frequently, it is critical to get up to date advice. If the tax allowability may affect your choice of investment, then you will need to know this before you commit to the purchase. A good example would be choosing your next car, where the difference between the best and worst tax allowances could be thousands of pounds of tax each year, and you might therefore choose a more expensive option with a lower tax cost.
Similarly, the timing of spending can make a huge difference. Just before or just after a financial year end will accelerate or delay tax allowances, as may the specific dates at which new changes come in or old allowances are withdrawn. Even the choice of new or used equipment purchases can impact on the rates of tax relief.
So if you are considering capital expenditure then the tax impact should also be clearly understood incase this affects the timing or type of spend you would make. Regardless, after the event we would review all of your potentially allowable expenditure and ensure we claim the best tax allowances possible.
Finally, Capital Allowances can be claimed of a very wide range of purchases. This would include commercial and residential property and holiday homes in certain situations. Plant and equipment, vehicles and things such as computers and furniture.
In fact the list is so long that the easiest thing is to tell us what you are planning to buy or allow us to look back with you historically and for us to guide you on the tax impact of when and how or what you have missed from the past.