Capital allowances

Capital allowances are a valuable tax incentive for businesses, designed to encourage growth and investment by allowing the cost of qualifying capital expenditure to be offset against operating profits, reducing the amount of tax paid.

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Capital allowances are available when a business purchases plant and machinery, or acquires, constructs, refurbishes or fits out commercial property used in an ongoing trade or investment business.

Expenditure on property and other fixed assets will often represent the most significant investment cost for a business, but the complexity of capital allowances means that many UK businesses don’t benefit from their full entitlement to relief.

How we can help

We have extensive experience in helping our clients across all sectors to claim available reliefs on capital investment. Our services range from upfront advice at the inception of a project through to the preparation of detailed capital allowances reports, and include:

  • Feasibility assessments: feasibility reports and estimates of the potential relief available to inform financial forecasts or to assess the benefits of larger project proposals
  • Detailed cost segregation reports: preparation of technical capital allowances cost segregation reports to optimise your business’s claims and support its filing position. These reports are suitable for filing with HMRC
  • 130% super deduction: advance advice and modelling to help businesses claim the maximum qualifying expenditure and avoid the pitfalls of this new relief, which is available to companies on expenditure between 1 April 2021 and 31 March 2023
  • Automation and systems improvements: advising on improvements and simplifications to end-to-end fixed asset processes, using market-leading data analytic technologies and automation tools to create efficiencies
  • Property acquisitions and disposals: helping businesses factor capital allowances into commercial negotiations and contract documentation to ensure that value is retained and maximised throughout the transaction
  • Past expenditure analysis and audit of historic claims: review of past expenditure to identify additional qualifying expenditure that can be included in an open tax return, often resulting in significant cash repayments and future tax savings
  • 100% research and development allowances: working with our specialist R&D team, we undertake thorough investigations to ensure businesses obtain the full benefit of this significant relief for equipment or facilities used for carrying out R&D activities
  • 150% contaminated land remediation relief claims: optimising 150% tax relief claims for companies on construction work relating to the costs of remediating land. The relief includes repayable cash credits if the claim creates or increases a loss and can generate significant tax savings
  • Negotiations and agreeing claims with HMRC: we also have a proven track record of assisting our clients with successful, timely and cost-efficient agreement of claims with HMRC, if required

Our approach

Our dedicated capital allowances and incentives team is led by specialists with an exceptional blend of tax and surveying expertise to help you navigate the complex rules.

We specialise in real-time, tailored advice, using tested methods alongside the latest technologies to minimise disruption to your business and achieve the best outcome.

Frequently asked questions about capital allowances

My business already claims capital allowances. What is the added benefit of a further review?

In many instances, capital allowances may have been underclaimed. We can often significantly enhance your business’s claim value by reviewing past expenditure.

What if my business does not have the information or time to make a claim?

We can use our combined tax and surveying experience to help fill in the gaps, minimising the demands on you and your team.

Are capital allowances only a timing benefit?

With appropriate planning, many capital allowances can be retained and, in most cases, do not impact the capital gains tax implications when the asset is sold.

When we acquired the property, the business elected to specify the part of the sale price that is treated as qualifying expenditure. Can we still make further capital allowances claims?

It is often worth reviewing these elections, because in many cases we find that purchasers still have opportunities to claim relief for additional qualifying expenditure.

Is my business out of time to make a claim for past expenditure?

There is no time limit for making a claim provided that the asset is still owned and used by your business. Past expenditure can often be included in a capital allowances claim for the current period, generating significant cash savings.

My business already makes research and development allowance (RDA) claims. Is there any added benefit of a further review?

Many RDA claims are often relatively modest and focused on equipment used solely for R&D activities. We often find that more valuable RDA claims for building or equipment used wholly or partly for R&D activities have been overlooked.