Understanding the full scope of Plant & Machinery is important for capital allowances claims purposes.
I was discussing capital allowances claims on commercial property yesterday and the person I was talking with clearly looked confused. I had been talking about the need to identify the plant and machinery values in a property. When I explained what items can attract capital allowances they said that when I had referred to plant and machinery they immediately thought of factories and industrial buildings not care homes, hotels and offices.
This made me think that it would be worth writing a short blog listing some of the most common items that attract capital allowances together with some less common ones. This will hopefully illustrate why nearly all property that is used for commercial purposes with a view to making a profit is worth investigating for a capital allowances claim.
Plant and Machinery – some examples
Here then are some examples ofitems of plant and machinery which in the right circumstances attract capital allowances:-
Advertising signs, Air-conditioning including ducts & vents, automatic doors & gates.
Beehives, blinds & curtains, burglar alarms & bullet resistant screens.
CCTV systems including cabling & ducting, chilling equipment and insulation, carpets, counters & fittings, catering equipment.
Distribution systems & dry docks.
Emergency lighting & electrical systems.
Fans & heaters, fire alarms, floodlighting floor covering (specialised), freezer rooms.
Generators. Hand dryers & hot water services. Intercoms and internal signs. Kitchen equipment. Lifts & hoists, light fittings & lamps, lighting protection equipment.
Mechanical gates & mezzanine storage platforms (movable).
Passenger lifts, paging systems, power installations. Racking cupboards & shelving, radio & television receivers. Safety equipment, security screens, smoke detectors, switchboards, switch gear.
Tea & coffee dispensers, transformers, turnstiles.
Ventilation equipment, vents. Wash basins, waste disposal units, wet & dry risers, works of art at a restaurant or hotel.
Plant & Machinery – Definition for the purposes of capital allowances claims
In reality machinery has the definition you would expect but for capital allowance purposes does throw up some interesting items which then qualify such as door handles, door closers and locks.
Plant is a slightly more difficult to define but for capital allowances purposes:-
“Plant is anything which is brought into existence (or improved) which has an enduring benefit for the trade.”
There are two key points here namely that the asset in question has to have an enduring benefit. HMRC has accepted that a period of two years or more can constitute an enduring benefit. The other point is that improvements to qualifying assets are to be treated as capital expenditure. Thus repairs and maintenance do not normally constitute capital expenditure whilst the cost of upgrading an asset may need to be capitalised rather than being treated as revenue expenditure.
If you want to investigate the possibility of a making a capital allowances claim on your property visit our website at www.curtisplumstone.com or telephone me, John Plumridge, directly on 02392 696815.