Capital allowances are a form of tax relief that many people are simply unaware that they are entitled to. Available to all UK based property owners, occupiers and investors, capital allowances allow you to claim back sums of money from your corporate or income tax. Find out if more, and see if you can take advantage by reading our blog!
What is Capital Allowances?
Capital allowances allow you to deduct from the overall corporate or income tax on your profits. HMRC will allow you to claim capital allowances on items that you use in your business, such as vehicles, machinery, furniture and much more.
It’s a form of tax relief that many businesses don’t even know exists, so therefore goes largely unclaimed.
How does it apply to property?
If you currently rent your business premises, then you are able to deduct the cost of that rent from your profit and then re-calculate what corporation tax is due.
You can deduct the cost of the following items from your profit, through the capital allowances system –
- Electrical installations
- Firefighting installations
- Plumbing and sanitary installations
- Data and telecom installations
- Carpets furniture and fittings
- Signage, alarms and CCTV.
When you tot up all you can claim back on your corporate tax, you could end up saving yourself a packet.
If you have purchased a commercial property from which to operate your business from, you could be entitled to up to as much as 44% of the property price back through capital allowances.
And until January 2015, you can claim this tax relief on the first £250,000 of expenditure in full in the year you incurred it.
Fore more information on what you can and can’t claim capital allowances on, visit the HMRC website.
Can’t I Do This Through My Accountant?
Most accountants are aware of Capital Allowances, however they don’t have the necessary experience of dealing with property and construction to recognise the areas that qualify for tax relief.
This is a really serious issue, particularly for a small business where the knowledge of capital allowances is quite small. Your business could be losing out on thousands of pounds worth of tax relief.
If you’ve spent money, buying a property for your business, improving your premises or installing essential equipment then you are likely to be able to make a claim. Even if you filed the expenditure some time ago, you may still have entitlement to your tax relief.
So Where Do I Go?
Thankfully, help is at hand. JDB Surveys are fully trained to provide help and advice when dealing with capital allowances.
We will undertake a site survey, and identify the areas where you may be entitled to capital allowances. We will then prepare a valuation, which can then be submitted as a claim by your accountant.
Don’t let a lack of understanding about capital allowances make you miss out on money that is rightfully yours. Call JDB Surveys now and see how we can help you claim your capital allowances.