I have helped many businesses over the years to optimise their capital allowances claims. Many of my clients had previously believed that their accountant was already claiming the full relief on their behalf. Unfortunately, without the detailed technical expertise, it is all too easy to miss opportunities.
What was, 28 years ago, a fairly straightforward regime to allow the cost of qualifying capital assets to be written off over time has become a minefield, with many traps waiting to catch out the unwary. The legislation has been tweaked and changed so many times that it is now a challenge just to know which is the relevant piece for a particular situation. There are many different types of allowance, each with their own rules, including:
- Plant & Machinery
- Business Premises Renovation Allowance
- R&D Allowances (not the same as R&D Relief)
Many of these categories also then have detailed rules for different situations. For example, for Plant & Machinery allowances there are special rules for:
- Integral Fixtures
- Enhanced Capital Allowances (ECA)
- Long-Life Assets
- Short-Life Assets
- Leased assets
- Assets included in a property acquisition
Case Study
An overseas investor was purchasing a property in the UK and the purchaser proposed a low figure for the capital allowances election (“s.198 election”). The local property adviser suggested the investor speak to me for advice about capital allowances and I was able to help them agree a much higher figure. This saved a significant amount of UK tax as a result