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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.

2018 will see the first wave of targeted legislation to “green” our existing building stock.  We look at the “cash back” opportunities for some of the options to address these new requirements.

The discussion of how to “green” buildings has been long in the making and new legislation is about to hit landlords from 1st April 2018.  In short, if you are granting a new lease or renewal of an existing lease, then the new Minimum Energy Efficiency Standards (MEES) will make a property with an EPC rating of below an ‘E’ unlawful.  In special circumstances, landlords will be given an extension of six months to comply from the date of granting the lease.  The regulation applies to all non-domestic buildings except those that do not require an EPC under current regulations such as listed buildings.  This phase precludes the full application to all leases including those existing which is due to apply from 1st April 2023.

The question for landlords is to consider how best to address any shortfall in the EPC rating.  The answer will be driven largely by the long-term plans for the property which may be to either adapt a light touch approach or to incorporate the works as part of a wider asset management initiative if the property is to be repositioned in the market.

Typical options which will be considered includes the replacement of the old fluorescent type lighting to more energy efficient LED lighting.  Or a more expensive option would be the replacement of windows and or cladding to a more superior insulated version.

Both options will attract Capital Allowances which provide a helpful “cash back” to the cost of addressing the energy efficiency of any building.   For certain works, the availability of Enhanced Capital Allowances (ECAs) will provide 100% tax relief in the year of expenditure, so as a 20% tax payer for every £100,000 incurred, £20,000 will be recovered.

Veritas Advisory provide early tax planning advice on all types of building refurbishments and to obtain an estimate of the available tax relief please contact one of our directors.