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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

Veritas Publish SBA Article in Taxation magazine

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.

10 Jul 2019

Written by: David Gibson

SBA Draft legislation Out

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.

15 Apr 2019

Written by: Clive Curd

Archive

Latest News

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.

New Case Law – Claiming a ‘Facility’

04 Mar 2019

This case centred on the ability, or otherwise, to claim a whole facility and involved a tax payer who designed and constructed a grain silo, the description of which does appear to be determined by which side you are on, but described as a “building” by HMRC and a “facility” by the Tribunal, to be neutral.

Veritas Advisory Appointed Capital Allowances Supplier for Surrey Care Association

27 Feb 2019

Veritas Advisory have been appointed as the dedicated supplier for Surrey Care Association for Capital Allowances advice. 

Hora Tevfik v HMRC

Another recent case law on Capital Allowances highlighted HMRC’s position on two main points.

1. HMOs (Houses of Multiple Occupation) do not qualify for Capital Allowances
2. Insufficient supporting information for a claim can enable HMRC to raise an enquiry beyond the normal time limits.

1. HMOs do not qualify for Capital Allowances.

HMO’s do not qualify, a long held view of ours since we were involved in the original HMRC briefing 66/01 and 45/10; it didn’t though stop a number of advisors pursuing claims on HMOs and which effectively gave rise to this latest ruling.

To clarify the position, a house which has been converted to bedsits, but has a ‘communal’ area of a kitchen, living room etc. such as an HMO, is still part of a dwelling house and therefore does not attract capital allowances. Blocks of flats however, with common areas such as basements, stairs and lifts do attract Capital Allowances, excepting the new Structural and Buildings allowances; yet another complication for taxpayers!

2. Insufficient Information to support a claim can enable HMRC to raise an enquiry

HMRC’s normal time limit for making an enquiry into a tax return that has been filed on time is one year from the filing deadline.

However, where there is insufficient information to determine the validity of a Capital Allowances claim, as there was in this case, HMRC has the power to make ‘discovery assessments’ to prevent loss of tax; this can be 4 years after the end of the relevant tax year, or where someone has deliberately not provided information, up to 20 years after the end of the relevant tax year.

Consequently, HMRC were able to raise an enquiry into the HMO claim made by Hora Tevfik even though the normal time limits had expired.

A common question we are asked by our clients is should we include your capital allowances claim report within the tax return? Our view has been yes, on this very basis that it is a valuation of tax allowances and that providing the report discloses sufficient detailed information to allow HMRC to make a reasonable judgement as to whether or not they make further investigations.

The case brought up several other interesting points, known already, but which are nevertheless useful to remember when preparing a claim:

1) that the burden of proof is on the taxpayer to establish the expenditure is qualifying
2) evidence of a property survey and specific identification of a plant and machinery can be used to substantiate any claim
3) using a professional advisor who provides a detailed report can provide added certainty to clients beyond the normal time limits for making an enquiry

Veritas Advisory Directors are recognised by HMRC and experienced across all property sectors including thousands of student accommodation and residential blocks with non-dwelling elements, using successful techniques that maximise the claims in accordance with the Capital Allowances legislation.