Owners of factories and storage businesses are being told that they could claim back tens of thousands of pounds using capital allowances, writes Shaun Murphy, managing director, Portal Tax.
The 2012 Finance Bill introduced a transitional period which runs until April 2014. If a commercial property is sold within this period then it can be treated in the same way it would have been previously. Before April 2012 you could choose when, and whether, you made a capital allowances claim on your business.
The owner does not have to make a claim for capital allowances before he/she concludes the transaction, but they will have to agree to the fixed value requirement within two years. The next time the property is sold, even if it is the very next day, then the new rules apply and capital allowances must be considered as if it were post April 2014.
If the current owner acts now they can claim the full capital allowances back for themselves. If they do nothing, a future owner of the property may benefit instead.
Portal Tax has helped businesses to maximise any capital allowance claims on their commercial property – on average, £105,000 for each business in outstanding capital allowance for items ranging from fire alarm systems, to heating, to air conditioning.
Data compiled by Portal Tax has revealed the top ten items by volume on which tax has been claimed back.
1. Ironmongery (including closers, latches, locks, etc)
2. Sanitaryware (including WCs, basins, second fix pipework etc.)
3. Power, Data and Lighting Fittings (including sockets, switches etc.)
4. Floor Finishes (including carpet, vinyl sheet etc.)
5. Hot and Cold Water Equipment (including pipework, tanks etc.)
7. Wall Finishes (such as ceramic tile splashbacks)
8. Fire, Communication and Security Systems (such as alarms, cameras, other equipment)
9. Heating, Cooling and Ventilation systems (including air conditioning, radiators, boilers etc)
10. Workplace Lighting (usage dependent )
Portal Tax estimates that 96% of businesses that own their own properties, or commercial property owners, could be owed a refund. Part of the service is ensuring that a valid claim is possible and if it isn't, or if Portal Tax don't find allowances to the value of at least £25,000*, then a fee will not be charged – making it risk-free to the client.
On average, Portal Tax has found claimable capital allowances ranging from 15-40% of the purchase price of the property although it depends on the building type and usage. In one case allowances worth as much as 68% of the purchase price were found.
Shaun Murphy, managing director, Portal Tax, says: “In the current climate factory and storage business owners - whatever size - need to save every penny that they can and, at the moment, most are unaware that such valuable capital allowances are waiting to be claimed. Literally hundreds of billions of pounds are due to factory and storage business owners, but most lack the necessary expertise to make the claim, which can be a complicated process. As we only make a charge if successful, we would urge any proprietor owning a factory or storage business to give us a call as they have nothing to lose and have potentially tens of thousands of pounds to gain."
Shaun Murphy is the managing director of Portal Tax, experts in tax legislation and how it applies it to businesses and properties.