All commercial property contains embedded plant and machinery that can qualifies for tax relief with capital allowances.
Therefore it is important to know about any unidentified qualifying plant within your property.
Why? Because it will help save money on your income or corporation tax bill and therefore improve your cash flow.
Capital allowances are a tax deduction to allow for the wearing out of qualifying plant and machinery over time and is used in tax computations in place of accounts depreciation.
There is no definition of plant and machinery within the tax legislation and relief is given on a case by case basis depending on the use, but typically includes items such as heating systems and air conditioning equipment, electrical systems, alarm systems, lighting, sanitary ware and lift equipment. Please see HMRC guidance for more information;
The full value of eligible plant and machinery allowances is rarely maximised by accountants or non specialist surveyors and tax advisors. However, by utilising the services of Savills specialist chartered surveyors and tax advisors, who by working side by side with your accountants, are typically able to uncover and secure tax relief of 35% of the purchase price of commercial properties, and a staggering tax relief level of up to 80% of refit and refurbishment costs.
Who can benefit?
This service is of significant benefit for UK taxpaying individuals and companies who have bought, built refitted or refurbished commercial property. It applies to both owners and occupiers of commercial property. Hotels, restaurants and allied businesses generally have a high level of qualifying plant and equipment on which to claim.
What is the service now available to BHA members?
BHA is now working in association with Savills, the UK’s number one property services company, to identify and categorise all assets that will qualify for capital allowances tax relief, and therefore reduce our members UK tax liability. This service includes the identification and valuation of the assets qualifying for capital allowances and the production of a detailed valuation report ready to be included within tax returns and submitted to HMRC.
What are the fees?
Savills undertake an initial free of charge and no obligation review of your properties, to assess the feasibility and value of any potential claim.
If, after the initial free of charge review, you decide to engage the services of Savills to identify and value the allowances, fees will be performance based relative to the additional tax savings generated.
If no unclaimed qualifying tax relief is uncovered, there are no fees.
Capital Allowances on commercial property expenditure are rarely maximised. This is due to shifting tax legislation and the requirement for specialist valuation procedures. The complexity of modern buildings contributes too.
Savills have developed a fully disclosed valuation methodology that meets the specific requirements of HMRC and the Valuation Office (VOA). Their proven multi–disciplinary approach utilises a combination of specialist forensic skills, combined with a well-established understanding with HMRC, built on years of experience in submitting claims, and agreeing values.