Capital Allowances

Date: February 2016, Category: Accountancy, Author: Dan Lewis

Claim Tax Back from your Commercial Property


  • Do you own a commercial building?
  • Are you a UK taxpayer?


If both of these answers are yes then there’s a good chance you’re due tens of thousands of tax back on your commercial property!

How ?


When you have signed the papers and bought your office / factory / pub or whatever commercial property it may be, you have purchased the bricks & mortar, but also within the building there are items such as air conditioning, heating units, even ceilings to an extent which all qualify for capital allowances.


Capital allowances are HMRC’s allowance for claiming tax relief on depreciating items. The rates of allowance depend on the type of expenditure, but generally, either 100%, 18% or 8% of the cost of the asset can be offset against profits, thus reducing profits and reducing tax!


Providing capital allowances haven’t been claimed on the property in the past then a claim can be carried out. The simple procedure for claiming the relief is;


  1. Enquiry form (CA10 Form) is completed outlining property & owner details
  2. ATS contact property owners solicitors & accountants
  3. ATS do the legal enquiries to confirm if allowances have been claimed. If not,
  4. ATS appoint a surveyor to value the capital allowances & prepare a ‘claim report’
  5. You ‘the property owner’ will ask your accountant to file the amendment and either amend the previous years accounts to claim a refund, or roll the allowance forward to claim in current and future years.


If you purchased a building after 6th April 2014 then you only have two years from the completion date to claim capital allowances. DON’T MISS OUT!


Case Study


We carried out a claim for Certax Accounting (Durham) LLP. They purchased an office, built in 2009, from Gladman Developments Limited (who originally built the office). Julian Palmer (The ATS lawyer) reviewed the legal works, confirmed the building as good to survey as no capital allowances had been claimed in the past, and the surveyors were appointed.


Property Purchase Price                                 –             £400,000


Capital allowances found                              –             £141,137 – eligible for annual investment allowance

Remember – capital allowances reduce profits


Tax relief obtained (Basic tax rate)                –             £40,929

Tax relief obtained (Higher tax rate)              –             £56,454


In short terms, in the current and future years, we have managed to extract £40,929 out of the building, effectively saving 10% on the purchase price!


If you own a commercial property / multiple properties and are unsure as to whether these have been claimed before, contact us and act now, as time is running out!


Matthew McConnell