Salmon Business Blog

Cost Reduction Specialists for the your Business

Browsing Posts tagged tax rebates

Businesses are failing to claim tax relief on fittings in commercial properties, experts say, which could save them billions of pounds

Properties from fish and chip shops to the Gherkin in London (front right) could be missing out on capital allowances on fittings, tax experts say. Photograph: Stefan Rousseau/PA

British businesses could save billions of pounds if they claimed full tax relief on the commercial properties they own, according to City experts.

Taking advantage of capital allowances, companies can claim tax relief on fittings such as air conditioning, radiators, pipework, cabling, lighting and security systems – anything relating to the intrinsic fabric of the building – even if the property was bought a decade ago, according to Peter Millwood, tax partner at Deloitte.

But while accountants routinely claim on everyday purchases such as curtains, carpets, fire extinguishers and radiator covers, they often fail to claim on other, less-easy-to-spot fittings.

Without receipts, a detailed analysis is needed to ascertain the correct value of the qualifying assets within the property. Also, companies can only claim for an item once and need to check that a claim has not been made before. Specialist firms send forensic surveyors to draw up a list of all the fittings in every room, including hidden cabling, then feed it into a computer model with 8,000 different matrices that comes up with, say, a price of £47.50 for a door bell in an office built prior to 1950 in a certain area.

Millwood said the "sheer scale of legislation to battle with" was putting many smaller firms off. "In most cases, business don't claim as much as they could claim, and there are still many businesses who don't claim at all … it could be billions of pounds," he said.

There are about 1.4m commercial properties in England and Wales, according to government figures, ranging from fish and chip shops to the Gherkin. On a typical £1m property, a Capital Allowance specialist would typically find £200,000 of unused capital allowances, which, assuming a mid-point between the higher-rate and lower-rate tax bands, means there is £65bn to £70bn in net tax rebates sitting unclaimed in commercial properties.

As for a typical SME with a commercial property,  it could save about £25,000.

On 6 April, changes to the capital allowances rules kick in that could see "unwary buyers unable to claim writing down allowances on many investments", said Millwood. "Up until April, most buyers will continue to be able to attribute part of their cost of acquisition of commercial property to plant and machinery and claim tax relief against their profits. The amounts can be considerable, and can radically affect the viability of deals. From April, a buyer acquiring property from a seller who has claimed writing down allowances will not be entitled in most cases to claim going forward unless an election [written agreement] is in place."

Also, the annual investment allowance – the 100% write-off for plant and machinery, excluding vehicles – drops from £100,000 to £25,000.

A UK leading tax specialist, said the changes also meant that any tax rebates would be based on the previous owner's purchase price of the building. In many cases, where the value of the building has gone up, this means that companies planning to buy a commercial property should do it before April – or they stand to lose a sizeable proportion of their potential tax rebate. However, if the value of the property has fallen, they would be advised to wait until after 6 April.

Capital allowances on commercial property have always been a bit of a "dirty secret" since being introduced in the UK after the second world war.  The government had considered getting rid of them altogether, but agreed to the new rules after industry lobbying, amid fears that companies might relocate to other places with capital allowances, such as the US, France, Germany or eastern Europe.

Assisting Day Care Nursery Owners in Reclaiming and Reducing Their Taxes

If every nursery owner has a different idea of what their ultimate “Wish List” would look like (a list of educational equipment and safety features they would like to incorporate within their business), then they all certainly have the exact same obstacles in acquiring their list – this being the  NECESSARY FUNDS to pay for them!

IF ONLY WE HAD ENOUGH FUNDS TO BUY……….

The plain and simple fact is that the vast majority of day nursery owners do have access to £1000’s in the form of a tax rebate from years of overpaid taxes.

HOW TO RECOVER YOUR OVERPAID TAXES

The process of reclaiming your over paid taxes is available in the form of a Capital Allowance claim.  Capital Allowances have been created by the government and allows business owners the ability to offset taxable profits against the purchase of capital assets for your business, and a tax payers right to claim.  Providing you have paid tax on any profits you made within the last 2 years, then you will be entitled to make a retrospective capital allowance claim and receive a lump sum in the form of a tax rebate.  Also by making your capital allowance claim you will also automatically begin to reduce the amount of tax you pay in future years.

The result of your capital allowance claim will allow you to purchase your “WISH LIST”

Capital Allowances are somewhat of a specialised area, and in order to fully maximise your potential claim you are advised to seek specialised help and advice.

To arrange an informal meeting with one of our Capital Allowance specialists, please call us today on: 01246 293011, alternatively email sales@salmon-business.com

Further help and information may also be found on our web site at www.salmon-business.com

Powered by WordPress Web Design by SRS Solutions © 2018 Salmon Business Blog Design by Storm Studios