Property Capital Allowances
Are you making the most of your Capital Allowance deductions?
Capital Allowances allow commercial property owners (Company or individuals) to claim tax relief on qualifying capital expenditure. If you own or lease a commercial property, our experts are here to help you fully explore these highly valuable tax incentives.
We’re not talking about the standard Capital Allowances that are traditionally picked up by your accountant. We’re talking about the specialist area known as Property Embedded Fixtures & Features (PEFFs).
The problem is the definition isn’t always clear cut – and that means you
might not be receiving the maximum benefits on your Capital Allowances
Announced by the Chancellor in the 2021 Budget, businesses are afforded:
- A 130% Super Deduction for main rate assets; and
- A 50% first-year SR Allowance for qualifying Special Rate assets for two years
130% Super Deduction
The Super Deduction gives relief at 130% of the qualifying cost – a very generous incentive compared to the usual 18% writing down allowance for investment in main pool plant and machinery assets.
This means your company can now claim back up to 25p for every pound you invest in qualifying machinery and equipment for two years from 1st April 2021.
50% Special Rate Allowance
The Special Rate Allowance gives relief at 50% of the qualifying cost in the first year, with the balance going into the normal Special Rate pool to be written down at the usual 6% rate in future years.
Capital Allowance advice from the experts
When it comes to your assets, knowing what actually qualifies as ‘plant and machinery’ is key. In most cases, plant and machinery means the usual tangible assets used in the course of a business. The problem is the definition isn’t always clear cut – PEFFs are often missed when calculating a Capital Allowances claim, which means you could be losing out on significant tax benefits.
Normally, accountants identify 'movable' items that qualify for Capital Allowances as a matter of course. However, you may be unaware that you can claim Embedded Capital Allowances on the ‘immovable’ fixtures and features of your property that are essential for your business to carry out its trade. This includes fixtures and fittings that were in place when the property was purchased, or those added afterwards.
Our Capital Allowance experts provide a free, no obligation preliminary review of your entitlement to claim.
That’s why it’s advisable to take professional advice from our experienced Capital Allowances team for all your current / planned capital expenditure on commercial property. We see the big picture, covering all the factors you may need to consider.
At Momentum, we see the big picture, covering all the factors you may need to consider, such as:
- How do you distinguish a capital improvement from a basic building repair?
- What happens if you sell the assets?
- Can you claim Super Deduction if you use asset finance?
- Should a Sole Trader consider incorporating to claim Super Deduction?
- Do partnerships qualify for the Super Deduction and SR allowance?
Why you should talk to Momentum...
- We are the experts in Property Capital Allowances known as PEFFs
- We work closely with you to ensure all your expenditure is captured and claimed
- We guarantee you a professional service delivered by RICS qualified specialists
- We ensure all is identified expenditure and activities meet RICS and HMRC guidance
- We provide you with a comprehensive technical survey report to support your claim, to Audit standard
- We use a contingency based fee model, so you only pay when your claim is successful
- We are extremely passionate about your business and the value we can add