What makes Buildings different?

Business and commercial property owners understand capital allowances are claimable on assets for permanent use in their business. By permanent, HMRC generally means an assets to be used for at least two years or more. Therefore assets such as computers, desks and chairs fall easily into this category. Accountants deal with these types of capital allowances all the time. This is on the basis the supplier invoices make it clear what has been delivered.

Things become markedly more complicated when dealing with the purchase, construction or development of a commercial property. Information and invoices are presented which will inevitably cover claimable and non-claimable costs. The Capital Allowances Act 2001 (CAA2001) at s173 refers to “Plant and Machinery (P&M) Fixtures” being claimable and defines a P&M Fixtures as:-

“plant or machinery that is so installed or otherwise fixed in or to a building or other description of land as to become, in law, part of that building or other land”.

Although there is not a definitive list within CAA2001 of these “Plant & Machinery Fixtures” many of them have been established through legal precedent and general acceptance with HMRC. A few examples of what is claimable are listed below:-

• Heating systems including boilers
• Electrical systems connected to qualifying plant
• Lighting systems
• Sanitary ware
• Storage racking
• Air conditioning systems
• Lifts

It is not only the initial cost of fitting these items which is claimable but also any relevant professional fees which need to be apportioned correctly. These would include architects, design engineers fees. In addition contract Preliminaries can also be apportioned.

Why you should Engage a Specialist?

Simply put a capital allowances specialist will maximise your capital allowances claim for “Plant and Machinery Fixtures”. We have the detailed training, knowledge and experience to analyse cost information relating to commercial property. This is true whether it is a second hand purchase, new build or the development of an existing property.

The cost information for these projects can be presented in a way which does not make it easy to define what is covered within the costs presented. Add to this the fact that much of the cost maybe defined as structural which may qualify for a different type of capital allowance named “Structural and Buildings Allowances” or SBAs. SBAs have their own separate rules in terms of how quickly they may be utilised to reduce your tax bills.

However tempting it might be to not engage a specialist to save on fees the downsides of not doing so could be huge. Inevitably claims could either be under calculated or overcalculated. This means the tax benefits are either reduced or if overcalculated opens the door to the possible clawback of tax and interest charges and penalties being levied. Also if an inflated claim has been made then HMRC will not only demand the repayment of the tax with interest they may impose a fine due to your negligence. Ultimately it is the taxpayer who has to take responsibility for the information in their tax returns.

How to Access Our Services

You can access our initial advice free charge in a number of ways:-

• email us using info@curtisplumstone.com
• complete our contact form
• for a specific project you can complete our Capital Allowances Estimate Form

To read more about how to choose a capital allowances claims specialist click our post here