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Furnished Holiday Lets – HMRC Clarify Legislation

The window to claim Capital Allowances tax relief on furnished holiday lettings (FHLs) is fast decreasing before repeal of the legislation in April 2025 and HMRC have now clarified the transitional rules about who can or can't claim.

07 Nov 2024

Written by: David Gibson

New Case Law – Capital v Revenue

A recent important Supreme Court decision in Centrica Overseas Holdings Limited v HMRC addresses the deductibility of expenses incurred by a company. The bar to dedeuct costs has been raised considerably

04 Oct 2024

Written by: David Gibson

HMRC To Increase Scrutiny on Capital Allowances Claims

Not only are Allowances more advantageous than ever before, but HMRC are strategically targeting tax leakage – including through Capital Allowances. Getting the correct advice is essential

04 Oct 2024

Written by: Russell Bennett

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Latest News

Furnished Holiday Lets – HMRC Clarify Legislation

07 Nov 2024

The window to claim Capital Allowances tax relief on furnished holiday lettings (FHLs) is fast decreasing before repeal of the legislation in April 2025 and HMRC have now clarified the transitional rules about who can or can't claim.

New Case Law – Capital v Revenue

04 Oct 2024

A recent important Supreme Court decision in Centrica Overseas Holdings Limited v HMRC addresses the deductibility of expenses incurred by a company. The bar to dedeuct costs has been raised considerably

HMRC To Increase Scrutiny on Capital Allowances Claims

04 Oct 2024

Not only are Allowances more advantageous than ever before, but HMRC are strategically targeting tax leakage – including through Capital Allowances. Getting the correct advice is essential

100% Full Expensing – What is it and why it’s important

09 Sep 2024

Hailed as the “Greatest Tax Break in History” when it was introduced in 2021, the 130% Super Deduction aimed to take some of the sting away from the hike in Corporation Tax rate that was announced in the same speech. Its replacement, Full Expensing (FE), took over in April 2023 as a slightly less headline-grabby 100% First Year Allowance. But what is it?

Some Good News for Furnished Holiday Let Owners

05 Aug 2024

Positive transitional rules have now been published allowing Furnished Holiday Let owners the ability to use Capital Allowances beyond April 2025

Case Ruling – HMRC v Altrad Services Limited

10 Jul 2024

The decision by the Court of Appeal will have far reaching implications in that it clearly resets the boundaries of what is a capital allowances avoidance scheme designed to increase the quantum of capital allowances claimed

Spring Budget Update

06 Mar 2024

Chancellor Jeremey Hunt announces changes to the capital allowances legislation affecting furnished holiday let owners

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

The point at which expenditure is “deemed” to have been incurred can bring an unexpected cash boost for clients at their tax year end.  We set out the key points to consider for determining how to bring forwards the entitlement to claim Capital Allowances.

It is possible for expenditure to be treated as being incurred for tax purposes long before a payment is due.  The legislation makes the provision for where a contract gives rise to an unconditional obligation to pay, no more than four months after which the obligation to pay becomes unconditional.

Therefore, if you take at face value that the timing of when you can claim Capital Allowances is in line with the entries shown on your fixed asset ledger you could be missing out on valuable tax relief.

In the case of a building contract, interim payment certificates are often raised on a rolling monthly basis from the start of the project to its conclusion.  The standard payment terms are often 30 days and so if your tax year end is 31 December 2015 and an interim payment is certified before then, even though it is shown as paid in January of the next period, Capital Allowances can be claimed on that payment in the earlier period.

The same principle applies to pre-payment of goods, in that often a piece of equipment is paid for in advance or a deposit paid.  The ability to then claim Capital Allowances will depend on the terms of the order and the underlying contract, but providing the ownership has passed and there is an “unconditional offer”, then Capital Allowances could be claimed at that point rather than when the delivery is made.

“To Do”

  • When reviewing construction payments, consider when expenditure is incurred to bring benefit of claiming Capital Allowances forwards
  • Check contracts for the treatment of pre-order or deposit payments