UK - Tax Savings Through Commercial Property Capital Allowance Service

Many commercial property owners miss and undervalue Capital Allowance, which is a taxable advantage which can be claimed against spending on Plant and Machinery or property (for the purpose of trade).

The tax advantages from this additional layer embedded within a business property are enormous, and just a few examples include elevators, fire escapes, heating, lighting, wiring, and security systems, to name a few.

If you own commercial property, investing in a Capital Allowance service could help you save money and reduce your property outgoings and is something you are legitimately able to claim. There are a few different Capital Allowance services that can help reduce your tax burden, the main one is working with an accountant who will work with you to determine the most advantageous way to account for your commercial property and any tax claims.

What are capital allowances?

There are a few different types of capital allowance, but in general, they refer to tax deductions that can be claimed on certain business-related expenses. This includes things like equipment, machinery, and vehicles used for business purposes. Capital allowances can also apply to buildings and structures used for business operations. claiming capital allowances can help reduce the amount of tax your business owes each year.

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The most common type of capital allowance is the Annual Investment Allowance (AIA). The AIA allows businesses to claim a deduction on up to £1 million of qualifying expenditure each year. This deduction is applied against any profits your business makes in that year, which reduces the amount of tax owed. There are other types of capital allowances as well, such as first-year allowances and writing down allowances. First-year allowances provide an additional deduction in the year that an asset is first put into use for business purposes. Writing down allowances provides deductions for depreciation on an asset over time.

No, not all capital expenditure qualifies for capital allowance. In order to qualify, the expenditure must be incurred on a qualifying asset. A qualifying asset is defined as an asset that is used for the purposes of carrying on a trade, business or profession.

Capital expenditure can take many forms, such as the purchase of machinery, equipment or vehicles. It can also include the costs of renovating or extending business premises. However, not all of this expenditure will necessarily qualify for capital allowances.

To determine whether an expense qualifies for capital allowances, it is necessary to consider the purpose for which the asset is acquired. If the asset is acquired for personal use then it will not qualify. Similarly, if the asset is acquired for resale then it will also not qualify.

It is important to note that even if an expense does not immediately meet the criteria to be considered a qualifying expenditure, there may still be hope. This is because there are some cases where an expense can be transferred from one category to another.

Capital allowances can be a complex topic, but claiming them can save your business a significant amount of money in taxes each year. If you think you may be eligible to claim capital allowances, contact us today on 02920 777 756.