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Capital v Revenue – Understand The Risks v Benefit

As we are fast approaching the self assessment filing deadline for individuals and the amendment window for corporate entities with a year end of March, understanding the importance of what constitutes capital or revenue expenditure, and the risks and benefits associated with it, is extremely important.

24 Jan 2024

Written by:

First Year Allowances for Corporate Members of Partnerships

In a positive move HMRC have updated their capital allowances guidance for partnerships stating that partnerships with underlying corporate partners can claim first year allowances

19 Jan 2024

Written by: Abu Choudhury

Substantial Unclaimed Capital Allowances On Existing Assets

Capital Allowances provide an opportunity to save substantial amounts of money in a lean market yet many property owners and occupiers are already sitting on vast savings without even knowing it.

23 Oct 2023

Written by: David Gibson

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Latest News

Capital v Revenue – Understand The Risks v Benefit

24 Jan 2024

As we are fast approaching the self assessment filing deadline for individuals and the amendment window for corporate entities with a year end of March, understanding the importance of what constitutes capital or revenue expenditure, and the risks and benefits associated with it, is extremely important.

First Year Allowances for Corporate Members of Partnerships

19 Jan 2024

In a positive move HMRC have updated their capital allowances guidance for partnerships stating that partnerships with underlying corporate partners can claim first year allowances

Substantial Unclaimed Capital Allowances On Existing Assets

23 Oct 2023

Capital Allowances provide an opportunity to save substantial amounts of money in a lean market yet many property owners and occupiers are already sitting on vast savings without even knowing it.

The Risk to Lawyers of Not Correctly Addressing Capital Allowances

23 Oct 2023

Solicitors acting for clients on a purchase or disposal of a commercial property must ensure they correctly address capital allowances; failure to do so may give rise to reputational and / or financial risk.

Maximising Capital Allowances and Avoiding Pitfalls Through Timing

23 Oct 2023

The rules surrounding the transition between Super Deduction and Full Expensing can be complex and the importance of fully analysing and understanding any contract for construction or purchase is significant.

Use Capital Allowances to Help Pay for Higher Spec Offices

23 Oct 2023

On a typical £1m CAT B fit out the landlord or occupier, whoever is incurring the expenditure, could recover up to £250k by claiming Capital Allowances.

HMRC Capital Allowances Enquiries Focusing On Certain Sectors

26 Sep 2023

An increasing number of claims being submitted to HMRC are not fully compliant with the legislation, and in some cases are double what they should be, particularly in certain industry sectors.

Unearthing Hidden Treasures – LGT Wealth Article

01 Sep 2023

Veritas Director David Gibson was recently interviewed by Nicholas Duffy of LGT Wealth Management for thoughts on how family offices and property owners can identify Capital Allowances to help leverage other investments. Click here to read in full

Offset ESG Costs With Capital Allowances

09 Aug 2023

The impact of both ESG and MEES on the property sector is resulting in significant capital investments. To incentivise and reduce the net cost of capital investment, tax relief is available by way of capital allowances.

George Osborne set out in the recent Budget headline grabbing increases to SDLT on commercial property transactions and tweaks in the business rates.  An additional proposal and an area which could lead to the increase in tax payable by some companies is the limit of certain tax deductions.

The Budget introduced, from April 2017, a limiting of corporate tax deductions for net interest expenses to 30% of a group’s UK earnings before tax for all UK companies/groups where net interest expenses are above a £2 million de minimis threshold level.  Currently, the amount of debt finance that a UK entity can claim interest deductions on for corporation tax purposes is based on an arm’s length basis, which relied on an assessment of each business, and often could lead to deductions of significantly more than 30%.  In making this assessment, UK entities were able to count earnings for overseas subsidiaries which will no longer be permitted.

Under current rules, corporation tax losses can be carried forward against certain profits to shelter the payment of corporation tax.  It was announced that the amount of profit that can be offset against losses carried forward will be restricted to 50% of the amount of the profits in excess of £5 million.  The £5 million is a group wide threshold and the changes will apply from 1 April 2017.

It is difficult to pass any meaningful comment on the full impact of these changes as both will be subject to consultations and so the detail is still to be confirmed, however, on the face of it, for certain companies these changes are going to have the effect of increasing the cost of tax payable. Although, there was the sweetener that corporation tax rates will fall to 17% from April 2020.