5 killer reasons to use a capital allowances specialist
For most businesses, straightforward capital additions can be categorised and claimed by their accountant during the routine completion of the accounts and tax computations. However, a specialist is often needed to unlock the tax relief available in a larger capital project, which might otherwise be missed.
Here are 5 reasons you should get in touch with a specialist for your capital investment projects:
1. Complex Entitlement
For larger spends there can be many entitlement issues that can add complexity to claiming capital allowances. Property purchases, in particular, require a detailed entitlement review with entitlement depending on the ownership and claim history. To ensure no opportunity is missed, best practice is to consider the capital allowances claim prior to completion of the legal purchase transaction. The YesTax team includes legal experts who can review and provide contract wording to ensure allowances are secured at the time of the legal transaction without slowing anything down.
Moreover, thought is required when considering entitlement to lucrative reliefs such as the Super Deduction, Land Remediation Relief and Research & Development Allowances (RDAs) which provide accelerated, premium rates of relief. Complexities can apply, for example, where Super Deduction Assets are leased, or buildings are partially used for R&D – for the latter, the potential difference here is the structural allowances otherwise written down at 3% over time, would in fact be claimed as RDAs at a 100% in the year of claim. Avoid being caught out by consulting on enhanced reliefs.
2. Detailed cost information
As a refurbishment, construction or development project grows, so does the complexity of the cost information. These projects can have multiple suppliers, including main building contractors, professional services architects and inspectors, and subcontractors for specialist joinery, mechanical or electrical installations.
YesTax is expert in liaising with suppliers, project managers and quantity surveyors to extract and obtain cost breakdowns in the level of detail required for tax purposes. Claims are prepared in accordance with best practice, providing line by line breakdowns where cost information is analysed, reconciled and properly substantiated with a specialist report. From a fundamental understanding of the tender, development and transaction processes, YesTax can obtain the information needed to unlock the tax relief.
Assessments, apportionments and interpretations will also need a specialist touch for large and complex spend, and the YesTax team has experience for properties in every sector.
3. Surveys & valuations
Despite best efforts, the necessary cost information doesn’t always exist. Documents are lost over time and in the case of a property purchase the buyer will rarely have access to the original information. Where there is little or no information available, YesTax is able to undertake a survey & valuation-based exercise in order to assess and identify the available capital allowances. YesTax comprises a multidisciplined team of legal, surveying and tax expertise which means we can identify and value the qualifying assets within a property and produce detailed reports to substantiate claims to HMRC.
4. Peace of mind
Although capital allowances is not typically seen as a high risk area of tax relief, larger projects and spends are more likely to be queried by HMRC on submission of the tax return. We always recommend that our reports are submitted alongside the tax computation. The detailed entitlement and analysis is set out clearly, showing the amounts claimed are well considered and supported. Should any queries arise from HMRC, assistance with correspondence and negotiations are included in all our engagements and to date, in the hundreds of claims undertaken by YesTax experts, we’ve never had to reduce or withdraw a claim as a result of an HMRC enquiry.
5. Nothing to lose, everything to gain
For any commercial property purchases, extensions or refurbishments YesTax are always delighted to undertake entitlement reviews on capital expenditure completely free of charge. There’s no commitment to be made until after we provide a proposal setting out the scope of the claim, the tax saving benefit and our fee for undertaking the work. This means clients are able to make an informed decision, at the outset, as to whether to proceed with a capital allowances exercise. For all our projects fees are contingent, and only charged on completion of a successful capital allowances analysis and report. We ensure our fee is reflective of the work involved in substantiating the claim and of course, given the contingent fee arrangement, no tax relief = no fee to the client.
Get in touch with the team for any and all queries on your capital allowances
YesTax. Positively Better.