How to generate cash through capital allowances

When businesses suffer catastrophic blows to their cashflow it is important to explore every opportunity to raise cash. Capital allowances claims provide a great opportunity to generate cash and are producing some fantastic results for YesTax clients.

Amending Tax Returns to Claim Historic Expenditure

Just last month, a leisure facility client was experiencing cash flow challenges following the spring Covid-19 lockdown. It now has trading losses but was profitable in the year ending 30 June 2019 and had already settle a corporation tax liability for this period. Between 2018 and 2019 the client carried out a major refurbishment project. The company had claimed some of the more obvious capital allowances for accounts coded furniture and equipment, however no claim for allowances on the building works had been made. The accountant sensibly decided to introduce the capital allowances specialists at YesTax. By visiting the property and discussing the projects with the builders, YesTax was able to identify allowable costs and increase the claim for capital allowances. This resulted in a timely refund from HMRC of £220,000 which has served to ease the client’s cash flow problems arising from a slow down in trade.

Reducing the company’s corporation tax liability through a capital allowance claim is an easy way to retain cash. Providing fixed assets are still owned, it is worth reviewing all expenditure incurred to see if additional allowances can be claimed.

It has never been more important to seek specialist tax advice. If you are an accountant and you would like to discuss a client case or you are a taxpayer with a commercial building and you have not taken specialist capital allowances advice, please contact