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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

Having concluded that the Capital Allowances legislation should remain the OTS made some recommendations for future consideration.

The report also produced some interesting facts about the companies that do claim, and the amounts, that could focus the future shape of the legislation and what it is trying to achieve.

The majority of businesses do not claim Capital Allowances; according to HMRC 564,000 corporate companies claim under £200,000 annually, with 18,000 occasionally over £200,000 and only 8,000 with a capex consistently over the Annual Investment Allowance of £200,000.

The Annual Investment Allowances (AIA) is certainly a useful investment relief for small businesses with the first £200,000 of expenditure being able to written down immediately although there remains the question of does it qualify or not.

A consideration proposed by the OTS it to widen the AIA and simplify it by allow for all assets acquired for the business (excluding land and dwellings), such as cars.  It is forecast that the cost to the exchequer would be £2.65bn. The OTS recommends maintaining the limit of £200,000.

Another proposal recommended by the OTS to simplify the Capital Allowances legislation is widening the scope, calling it Full Scope Capital Allowances, where all assets used in a business will qualify, with the introduction of a 2% rate against those items that normally don’t qualify and a reduction in the writing down allowances from 18% to 16% and a reduction of the special rate pool from 8% to 7%.

Whilst it this additional pool of allowances will help certain businesses it is difficult to comprehend how this will simplify the system; on the contrary it just adds another layer of analysis.

There is no straightforward way to simplify the Capital Allowances legislation but the OTS still recommended retaining the Capital Allowances system as opposed to replacing it with a depreciation based system.

We have no doubt there will be further change once the proposals have been considered in further detail, but most respondents, as did we, made comment that the continual change is not helpful to business.