CAPITAL ALLOWANCES CONSULTANTS

Capital allowances are expenditures that can be claimed by businesses against their taxable profit. They can be claimed on most assets purchased by the business, and fall under different qualifications, which determine the value that can be claimed back on them. While some of the expenditures can be deducted from the taxes in the year in which they were made, others are spread over multiple years. The capital allowance claim should be included in the tax return, which is submitted to HM Revenue & Customs.

What Are Capital Allowances?

If you are looking for a capital allowances definition then are tax deductions that are claimable for the decline in the value of assets such as an investment property. For property investors, it means the deductions you can claim as an expense for the age of the asset and any wear and tear of it alongside the included assets. The capital allowance claim should be included in the tax return, which is submitted to HM Revenue & Customs.

What Qualifies As A Capital Allowance?

Generally speaking, to qualify for capital allowance tax relief the asset for which you are claiming must be owned by the company or the individual who is making the capital allowance claim. Anything spent on the installation of plant and machinery costs or the demolition costs of a property which is currently held as a fixed asset will qualify for capital allowances.

Who Cannot Claim Capital Allowances?

Non-trading companies cannot claim capital allowances. This is because they are not using capital assets for trading purposes. However, there can be exceptions made if a non-trading company earns capital expenditure for certain purposes, for example, the construction costs of a building for future use.

Types of Capital Allowances

Annual Investment Allowance 

Writing Down Allowance

First Year Allowance

Small Pools Allowance

SDLT Relief

CAPITAL ALLOWANCES FOR

ACCOUNTANTS

Many Accountancy Practices work with Capital Allowances on a daily basis.

However, identifying Embedded Capital Allowances from the original purchase price takes a specialist team with a detailed knowledge of statute and case law, as well as a high level of expertise at the surveying stage to break down the qualifying and non-qualifying elements of a building.

As capital allowance specialists, CapEx Tax has collaborated with some of the leading accountancy practices on a daily basis to deliver in our specialist area of Capital allowances on behalf of them, get in touch today to find out how we can help.

CAPITAL ALLOWANCES FOR

SOLICITORS

Solicitors are under pressure to complete more and more detail at the conveyancing stage.

This includes the need to complete section 32 of the CPSE (Commercial Property Standard Enquiry). Section 32 deals with Capital Allowances and whether the current owner has claimed for any ’embedded plant and machinery within the building.

CapEx Associates, as capital allowances consultants, provide the perfect solution to this by using our team of capital allowance experts to complete the Capital Allowance section of the CPSE on your behalf. We do this whether you are acting for the buyer or seller, regardless of your business location within the UK. Contact us today for more information.

Lady explaining SDLT refunds to a client

How Can CapEx Tax Specialists Help?

Businesses who are wanting to make a capital allowance claim must act proactively.

Capital allowances consultants such as CapEx Tax can ensure that any claims or adjustments made are completed in an appropriate and timely manner to prevent a lengthy application timeline or additional scrutiny from HMRC during the claims process. 

There are many tax laws to follow that can often be overwhelming but CapEx Tax can help businesses to make the most of their tax relief claims by ensuring that all applications are compliant with the law and regulation and help to grow your company’s financial health.

  Contact us today for more information and to discuss how we can help you in more detail.

FREQUENTLY Asked questions

Property developed and held as trading stock will not qualify for capital allowances claims. However, capital allowances can be claimed if the property is subsequently moved to fixed asset investments on the balance sheet.

Capital allowances must be claimed in the accounting period you bought the item if you want to claim the full value under annual investment allowance first-year allowances If you do not want to claim the full value, you can still claim part of it using writing down allowances at any time as long as the item is in your ownership.

If you buy something under a hire purchase contract you can claim for the payments you have not made yet when you start using the item. You cannot claim the interest payments.

Capital allowances must be claimed in your self-assessment tax return and they should be claimed 12 months after the 31st January which is the filing deadline for all tax returns.

To help investment, changes were made to capital allowance claims.

Since April 2023, but before April 2026, companies can claim 100% first-year capital allowances on qualifying expenses.

This allows full tax relief on expenditure in the year it was earned. This is known as full-expensing.

Contact Us Today For More Information About Capital Allowances

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