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Veritas Blog for Harold Sharp Proptech

As part of our working relationship with Harold Sharp accountants we were recently requested to add an article on the new Structures and Buildings allowances for their Proptech initiative.

09 Dec 2019

Written by: Nolan Masters

Guidance on Structures & Buildings Allowance

It has taken HMRC a year since the Structure and Buildings Allowance (SBA) was announced in the November 2018 budget to publish the detailed guidance on its new tax give away for capital expenditure on all non-residential buildings.

09 Dec 2019

Written by: Clive Curd

New Case Law – HMOs and HMRC Enquiry Times

Another recent Case law ruling, Hora Tevfik v HMRC (2019) recently dismissed Capital Allowances claims on HMOs (Houses of Multiple Occupancy) plus also highlighted the ability of HMRC to make enquiries into claims beyond the normal time limits.

11 Nov 2019

Written by: Clive Curd

Archive

Latest News

Veritas Blog for Harold Sharp Proptech

09 Dec 2019

As part of our working relationship with Harold Sharp accountants we were recently requested to add an article on the new Structures and Buildings allowances for their Proptech initiative.

Guidance on Structures & Buildings Allowance

09 Dec 2019

It has taken HMRC a year since the Structure and Buildings Allowance (SBA) was announced in the November 2018 budget to publish the detailed guidance on its new tax give away for capital expenditure on all non-residential buildings.

New Case Law – HMOs and HMRC Enquiry Times

11 Nov 2019

Another recent Case law ruling, Hora Tevfik v HMRC (2019) recently dismissed Capital Allowances claims on HMOs (Houses of Multiple Occupancy) plus also highlighted the ability of HMRC to make enquiries into claims beyond the normal time limits.

Veritas Publish SBA Article in Taxation magazine

10 Jul 2019

In the latest edition of Taxation Magazine Veritas Director Clive Curd takes a practical look at how the new Structures and Buildings Allowances legislation works.

Success at the National Surveyor’s 7’s Rugby Tournament

17 May 2019

Congratulations to Jack Hooper of Veritas and his teammates from the Thirdway Barbarians team who won the recent National Surveyors 7's rugby tournament at Richmond

Veritas Become Member Firm of PAI Commercial Property Network

07 May 2019

Veritas are pleased to announce they have become a Member Firm of PAI Commercial Property Network, the UK's largest connected network of commercial surveying practices.

SBA Draft legislation Out

15 Apr 2019

HM Revenue & Customs have issued the draft legislation for the new Structures and Buildings Allowances legislation and have requested comments by April 24th before final drafting ready for issue later this year. Veritas Advisory will be responding.

New Case Law – £226m in Dispute!

05 Apr 2019

The First Tier Tribunal considered the capital allowance claim of a hydroelectric power generation scheme at Glendoe, in Scotland; the total construction cost was approximately £300m with HMRC accepting £34 million, leaving £226 million in dispute.

Veritas Advisory Appointed Capital Allowances Supplier to Carehome.co.uk

08 Mar 2019

Veritas are now a listed supplier to Carehome.co.uk as Capital Allowances advisor to maximise the tax reliefs on acquisitions, refurbishment and extensions of care homes.

In a surprise move, the Chancellor announced that businesses and investors would receive a timely cash boost by increasing the Annual Investment Allowance (AIA) from £200,000 to £1m.  Here we explain how businesses can make the most of this two year opportunity.

The AIA has been around for a number of years and the Chancellor for the government of the time has used it as a fiscal tool to incentivise the investment into certain business assets.  The value of the AIA has been as low as £25,000, in 2012, to now being announced it will increase from its current £200,000 level to £1m from 1 January 2019.

This should be seen as a great opportunity for businesses and investors to receive a significant amount of cash back on any planned capital investments over the next two years, after which the AIA is expected to return back to £200,000.

Businesses and investors are able to claim the AIA in respect of capital expenditure which qualifies for either general or ‘special rate’ plant and machinery (P&M).  It should be noted that the newly announced Structures and Buildings Allowance (SBA) can not be claimed under the AIA.  The AIA provides 100% tax relief as an upfront allowance for qualifying expenditure up to a specified annual limit.

For those chargeable periods which straddle 1 January 2019, there are transitional provisions which come into play, which will calculate the revised available AIA limit for each transitional period.

Example

A company with a 12 month chargeable period from 1 April 2018 to 31 March 2019 would calculate its maximum AIA entitlement based on:

(a) the proportion of the period from 1 April 2018 to 31 December 2018, that is, 9/12 x £200,000 = £150,000, and

(b) the proportion of the period from 1 January 2019 to 31 March 2019, that is 3/12 x £1,000,000 = £250,000.

The company’s maximum AIA for this transitional chargeable period would therefore be the total of (a) + (b) = £150,000 + £250,000 = £400,000, although in relation to (b) (the part period falling on or after 1 January 2019) no more than £250,000 of the company’s actual expenditure in that part period would be covered by its transitional AIA entitlement.

 

Where businesses or investors incur qualifying expenditure, which is greater than that annual limit, then they are able to claim tax relief at the normal Capital Allowance rates.

For those businesses or investors which are to embark on large expenditure projects over the next two years, careful consideration needs to be given, firstly in terms of the level of qualifying expenditure for normal P&M allowances and also at which point in time is the expenditure deemed to have been incurred, as this will dictate the level of the AIA limit to be applied.

Secondly, where the level of qualifying expenditure exceeds your AIA limit, a tax planning point is to allocate the qualifying expenditure which attracts the lowest rate of tax relief i.e. the special rate pool, in order to maximise the tax relief on the remaining P&M qualifying expenditure.

Often overlooked, is the fact that qualifying expenditure also includes the acquisition of second hand assets, which for AIA is deemed to be new expenditure and can be claimed against it.  With the purchaser now potentially gaining a faster rate of benefit than the seller, the way in which the benefit is negotiated may change for future deals.

Finally, given the increase to the AIA limit it should ensure that even for perceived smaller capital projects, it is now worth undertaking a detailed Capital Allowances exercise in order to identify qualifying expenditure to generate a tax cash saving by claiming it against the increased AIA.