Insights
Seminars & Events
News

Latest Insights

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

Archive

 

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.

The current Capital Allowances system comprises approximately 400 pages of legislation.  In addition, HMRC provide lengthy guidance manuals on how to interpret the legislation, supported by various case law.  In comparison the accounting rules for depreciation are a mere 11 paragraphs of guidance notes.

As the OTS report suggests, businesses should employ specialist capital allowances consultants to work out what does and what does not qualify. There are two main areas of complication; identification and property investment transactions.

To determine what items of expenditure to claim, a business must consider many factors, including that of its own specific trade and how it uses the item in question, what costs are associated with that item and splitting out costs, which are often aren’t comprehensive, to ensure the correct pool allocation.

Identification of machinery by accountants is straightforward.  However, complications arise in the category of land and buildings and leasehold improvements.

Expenditure on a building project comprises a contractor valuation of the works, elements including labour, plant and materials, and in addition there will be various professional fees, site set up costs and other directly incurred expenditure.

There is no definition of what plant is to help allocate this item for a relief and the information produced on a project is not a tax friendly list of items, set out for the calculation; indeed it is the opposite.

The process is further complicated with the acquisition and disposal of investment properties.  This is noted in the report as one area that stands out for attention.  Under FRS105 investment properties are revalued every year and are not depreciated.  The OTS stated this is a challenging problem for which it has not found a simple answer.

The current process for transferring Capital Allowances from a Seller to a Buyer on sale is by a mechanism known as a Section 198 election, and rules introduced in 2012 and 2014 only made the process of agreeing what value can be passed to a new owner even more complicated.

Without specialist advice Capital Allowances are often missed with a common mistaken assumption that they are not relevant on that particular transaction with no scope for further allowances to be identified and claimed.