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Capital Allowances Incentives to Increase?

In a positive move to encourage capital investment Rishi Sunak announced in the 2022 Spring Statement plans to expand the Capital Allowances legislation, subject to a consultation process, to be formally announced in the autumn budget and to take effect from April 2023

23 Mar 2022

Written by: David Gibson

Veritas Contribute to UKAA Publication – Improving Returns on Build to Rent

As a member of The UKAA, we were pleased to be invited to contribute to their latest buzz news issue, in which we explain how investors-operators of build to rent can improve investment returns by claiming capital allowances

02 Nov 2021

Written by: Nolan Masters

Veritas Confirmed New Member of UKAA – The Organisation for the UK Build to Rent

Veritas Advisory have now been confirmed as a new member of UKAA, the organisation for the UK Build to Rent sector. 

18 Oct 2021

Written by: David Gibson

Archive

 

Latest News

Capital Allowances Incentives to Increase?

23 Mar 2022

In a positive move to encourage capital investment Rishi Sunak announced in the 2022 Spring Statement plans to expand the Capital Allowances legislation, subject to a consultation process, to be formally announced in the autumn budget and to take effect from April 2023

Veritas Contribute to UKAA Publication – Improving Returns on Build to Rent

02 Nov 2021

As a member of The UKAA, we were pleased to be invited to contribute to their latest buzz news issue, in which we explain how investors-operators of build to rent can improve investment returns by claiming capital allowances

Veritas Confirmed New Member of UKAA – The Organisation for the UK Build to Rent

18 Oct 2021

Veritas Advisory have now been confirmed as a new member of UKAA, the organisation for the UK Build to Rent sector. 

Veritas Supporting Charitable Causes

01 Oct 2021

We have chosen to support four charitable causes reflecting activities that are close to us and to people we know and would like to raise awareness of.

Using Artificial Intelligence for Capital Allowances

27 Sep 2021

Can Artificial Intelligence help claim capital allowances? In addition to preparing detailed claim reports for clients, Veritas Advisory, in partnership with Brunel University and Innovate UK, are applying technology to solve some of the issues, the main one being how to use data efficiently and correctly.

New Case Law – Potato Store is Plant

07 Aug 2021

JRO Griffiths Limited v The Commissioners for Her Majesty’s Revenue and Customs [2021] UKFTT 257 (TC) resulted in the taxpayer winning their appeal in whether or not a warehouse used to store potatoes for a crisp manufacturer is plant.  The taxpayer won on 2 counts.

Estates Gazette Article – Capitalise on Allowances

20 Jul 2021

Veritas Advisory Director Nolan Masters, together with Alex Barnes a Partner at BDB Pitmans LLP, have published an article in Estates Gazette on how capital allowances claims can mitigate the increasing cost of tax on property investment.

New Case Law – Satellites

16 Jul 2021

A Capital Allowances case Inmarsat Global Limited and The Commissioners for Her Majesty’s Revenue and Customs UT/2019/0167 V), has been refused by the Upper Tier Tribunal, in relation to the launch of satellites.

Taxation Magazine Article – The New Super Deduction

04 Jul 2021

In the June edition of Taxation Magazine Veritas Advisory Director Nolan Masters set out how the new super deduction and special rate allowances will affect property owners, occupiers and investors. Click here to read the article in full

Recent updates to the Carbon Trust Enhanced Capital Allowances (ECA) system may only represent minor tweaks but maintain a significant cash boost for the investment in a wide variety of property assets, from boilers and lighting to rainwater harvesting.  This often forgotten cash back government incentive, if considered at the outset of any construction project, can significantly reduce net project costs.

The Carbon Trust’s Energy Technology list (ETL) https://etl.beis.gov.uk/engetl/fox/live/ETL_PUBLIC_PRODUCT_SEARCH details all assets on which ECAs can be claimed against, with the big-ticket expenditure items being:

  • Lighting
  • Chillers
  • Boilers
  • Lighting and HVAC controls
  • Air conditioning units
  • Pipework insulation
  • Energy monitoring
  • Water saving technology

Once you have identified that your project includes some of these assets, the product selected then must meet the specific performance criteria set for that asset category.  This is often where the claim process falls down, as it will require that product to either be listed or certified as compliant by the individual supplier at the time the expenditure is incurred.  Collating the necessary information is not straightforward and retrospective claims especially are unlikely to be as successful, if picked up at all, particularly if left to the accountant to address 12 to 18 months after the project’s completion.

The benefit for partnerships and individuals is every £100,000 spent on ECA qualifying assets, provides £45,000 cash back in the form of tax relief in the year that it spends the money (£19,000-20,000 for companies).  Veritas Advisory advised on a recent £1m office refurbishment for a firm of lawyers and identified £300,000 of ECAs which represented a £135,000 reduction in the Partners tax return for that year; the increased energy efficiency and potential rental uplift providing further reward.

Claiming ECAs is not an automatic benefit; the key point is that it must be demonstrated by the tax payer that they have the entitlement to make a claim at the time they incurred the expenditure.  Veritas Advisory have an ECA process where by working alongside the project team we liaise with the suppliers to assess the ECA status at the time of procurement and if necessary, facilitate the product listing or certification required to make a claim.

If you would be interested in finding out more about how Veritas Advisory could assist in this area, then please contact one of our Directors (https://www.veritasadvisory.co.uk/about-us/).