Over the past few years there has been a steady increase in firms offering capital allowances claims services in respect of commercial property expenditure. Given the wide variety of suppliers of these services it is important for the potential client to understand that not all suppliers may have your best interests at heart.
Marketing Led Firms
There has been a rapid increase in the number of websites offering capital allowances services. We have frequently been contacted by accountants, solicitors and business owners who are seeking a second opinion. In many cases the information they have been given by another provider is at the best misleading and in the worse cases just plain incorrect. Having now had numerous conversations with business owners and their professional advisers we have become aware of several re-occurring themes which we think potential clients need to consider.
Overstating Potential Claims
In estimating the potential for a capital allowances claim we have come across firms who have overstated the potential capital allowances which may be available. In doing so, the customer is lured into engaging the company believing that their expertise must be greater than all other firms who have given realistic estimates. Of course when the resultant claim is produced it is far less than the original estimate but by that time the client is committed to paying the resultant fees.
We have even come across examples where clients have been persuaded to make a capital allowances claim where there was potentially little benefit in them doing e.g where they had little or no tax liability. In one case we were contacted by a business owner who had been persuaded to a make a claim which was of no benefit to them and was subsequently sued by the capital allowances company for non-payment of their invoice.
Although a capital allowances claim can have a long term benefit to a business it is important that the payment of fees does not disrupt the businesses cash flow. We have seen fees quoted by other companies which would leave business owners out of pocket for one if not two years.
In contrast we ensure our fees are tailored to the client’s circumstances and that they will see a financial benefit in both the short and long term. In some cases we have had to tell clients that, in their circumstances, it is not in their best interests to make a capital allowances claim. That is to say they should wait to see if their circumstances change which may mean a claim is possible in the future. We believe this is the only approach which should be taken as it establishes long term relationships and increases the reputation of our business over time.
Lack of Experience and Expertise
It is important that the capital allowances claims specialist you appoint has the necessary experience and expertise to undertake the work. If the specialist makes a mistake or basis their claim on incorrect principles then it is the client who will suffer if HMRC investigate their claim.
Some new suppliers in the capital allowances claims market appear to have no specialist experience and in many cases are working just as introducers to other firms. However specialists, like ourselves, generally come from professional tax, accountancy or surveying backgrounds (or a combination of these disciplines) and can therefore advise you on your commercial property expenditure tax relief.
The last point to make here is that many firms do not actually directly employ the specialists who will undertake the capital allowances claims work. This means that in many instances the client does not know who will actually be undertaking the work and if they are qualified to do so. In contrast if you deal with us you will have a named contact who is a dedicated capital allowances specialist with all the required experience and knowledge required to deal with the complexities of compiling a capital allowances claim on your behalf.