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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

The fitting out of any property space often comes with a large capital cost.  The only way that cost can be offset for tax purposes is to claim Capital Allowances and Revenue Deductions.  In this article we set out one example where 35% of the total fit out cost was recovered.

Given the nature of fit out projects, typically with minimal structural works, they often give rise to a high proportion of qualifying expenditure. There is sometimes a perception that to identify Capital Allowances within fit out projects it is simply a case of referring to a list of items that typically qualify and extract these from cost information provided by the contractor carrying out the work. Whilst there is legislation that provides guidance on what qualifies there is no explicit list as such.

Consideration needs to be made not only to the cost of the item within a building contract but also to all the additional ancillary costs which are linked to the installation of that qualifying item. Often these ancillary costs can add 25-35% to any claim for Capital Allowances.

These ancillary costs are not restricted to on costs, such as site set up costs and professional fees but also include costs not always clearly defined in construction projects such as alterations to existing structures, forming service risers, or removing / replacing ceilings, walls, floors to allow for the installation of qualifying items.

An example could be the cost of taking down, storing and putting back a floor to allow for the electric and data installation, or on a larger scale, the formation of new lift shafts within an existing building. With fit out projects there is greater opportunity to claim for these works due to the very nature of the build methodology.

These costs are often not apparent within information provided by a contractor and so it is necessary for a specialist Capital Allowances advisor, with surveying expertise, to visit site and extrapolate these works.

Identifying such ancillary costs resulted in a claimant recovering 35% of the fit out expenditure on a standard office fit out project costing £800,000. £625,000 qualified as Capital Allowances, with further costs being treated as revenue deductions which can be offset in the profit and loss account. The claimant was a partnership, with each partner subject to 45% income tax. Consequently, on an outlay of £800,000 the partners between them were able to recover over £280,000 off their tax bill, with the majority being saved immediately in the year of expenditure.