If you are outfitting commercial properties, capital allowances are a way of gaining tax relief against the value of the capital spent on improving those properties.
Capital allowances apply to all properties within the commercial sector and the tax relief that can be gained comes in the form of a percentage rebate or reduction in the size of your tax bill.
Capital allowances exist as a government incentive for companies to spend their capital and encourage large scale growth within the private sector.
What Are The Financial Benefits?
Typically, the capital allowances available for a Category ‘B’ fit-out project range from 75% to 85% of the expenditure incurred.
Assuming a 17% Corporation Tax Rate, this equates to recovery of between 12%-13.5% of the original capital investment.
Category ‘B’ Office Fitting Out Works; Capital Allowances Min / Max % Range
At Capsure Tax we are a specialist Capital Allowances Advisory Firm with significant experience in the preparation, negotiation and agreement of capital allowances claims for major projects.
Our people are dual qualified tax, surveying specialists with significant experience in this specialist area of taxation.
This enables us to consistently optimise the capital allowance position for each construction project for property transaction where we are retained.
Our client centric approach is based on, clear communication, all- encompassing & regular client engagement, with the Partner involved in all aspects of each instruction.
Capital Allowance on Office Fitting Out Works
Office fitting out works are a major capital commitment for business. They require a high level of capital investment to plan, deliver and complete.
Government tax Incentives in the form of capital allowances are available to encourage businesses to undertake this capital investment. These incentives are obtained through savings in Corporation and Income Tax.
The main allowances which are available in relation to office fitting out works include Enhanced Capital Allowances (ECAs), Plant and Machinery Allowances (PMAs), Integral Feature Allowances (IFAs) and structure and building allowances (SBAs).
Obtaining the relief is not an automatic process and the tax rules are complex and often misunderstood. As a result, many businesses miss out on the tax relief available to them.
Capsure Tax is a leading Capital Allowances Advisory firm which specialises in securing the available tax incentives in relation to construction projects and has particular expertise in relation to office fitting out works.
The involvement of Capsure Tax’s specialist Capital Allowances Team will ensure that the capital allowances position is optimised, professionally managed and HMRC compliant.
|£10,000,000 Development Cost||+ 31.25%|
|Tax Saving of £3.125m|
Assuming a 12.5% Corporation Tax Rate, €3.125m of tax savings can be recovered for a €25m hotel development for a combined plant and machinery and industrial building allowances claim.
A significant proportion of the allowances (50%) can be accelerated and claimed over 8 years compared with a traditional Hotel Building Allowances claim where the relief is given over 25 years.
Our Partners each has over 25 years experience working on major office development projects. We are one of the leading consultants working in the commercial offices sector, having prepared claims for some of the largest office developments constructed in the UK and Ireland in recent years.
£150M ‘Grade A’ Offices – London
The project comprised a £200m Shell and Core & CAT ‘A’ offices.
£280M ‘European Headquarters’ Offices – London
The project comprised the construction of a £280m Shell and Core Office and associated CAT ‘A’ fitting out works.
How The Process Works
- Tax Compliance Support
We provide the provision of specialist capital allowances input and support to your retained Tax Advisors and/or in-house teams. We work with your tax advisors on specific projects.
- Transaction Support
We provide capital allowances advisory support during the legal due diligence process, particularly in relation to occupational leases, landlord contributions, purchases and disposals.
- Project & Development Support
We complete the preparation of capital allowances claims for property developments, refurbishments and fitting out projects.
- Strategic Consulting
We provide the implementation of capital allowances strategies including the implementation of capital allowances systems and processes for clients with large capital expenditure programs.
- Historic Capital Expenditure Audits
We provide analysis of historic capital expenditure and capital allowances claims including the identification and retrospective recovery of unclaimed tax relief.
- Accelerated Capital Allowances Planning
We assist trading companies to invest in qualifying energy efficient technologies for their business.
- Agreement for Lease Negotiations
Providing capital allowances advisory support during the agreement for lease negotiations e.g. Landlord contributions to fitting out works.
- HMRC Negotiation Support
We undertaking all necessary negotiations to reach a successful conclusion to the submitted capital allowances claims. We take all the stress out of communicating with HMRC.
Contact us today to find out how we can help you: