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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

In July 2017 the Office of Tax Simplification made several recommendations for the simplification of Capital Allowances.  That September the Chancellor asked the Office of Tax Simplification to explore the potential for replacing Capital Allowances with a regime based on accounts depreciation.

Why did the Office of Tax Simplification (OTS) investigate changing the Capital Allowances legislation, what did they take into account to apply this to a new system and analyse this from a business point of view.

In 2015/16 1.2million businesses claimed Capital Allowances. The Exchequer forecasted in 2017/18 that if there was no relief for capital expenditure by way of Capital Allowances they would recover an additional a £21.5bn in tax.

Capital Allowances represents the 6thlargest relief overall and the only other business relief that is higher is the employer’s national insurance contributions.

However Capital Allowances is widely acknowledged as an over complicated system which has evolved over the years to its current state and any changes to the system would impact businesses differently by industry and size.

The consensus of all respondents to the consultation was any change away from Capital Allowances would not be straightforward.

The purpose of the report was to consider if depreciation was a feasible alternative approach, if a practical transition could be achieved and the consequences of such a change.

A concern of aligning Capital Allowances to depreciation was that the government could lose a degree of control such as not being able to adjust the writing down levels should the Government wish to encourage investment.

Examples of accelerated allowances that could be lost include the 100% energy efficient Enhanced Capital Allowances for green technologies plus research and development allowances.

Significant difficulties would also arise during any transition period with certain industries losing out.

On the flip side the depreciation system considered was to categorise assets for accounts into buildings, plant and machinery, fixtures and fittings, meaning that the process has only to be done once, reducing the burden to the taxpayer and simplifying the process.

Additionally, under the current regime a taxpayer is unable to claim on items where they receive a grant payment but under depreciation the amount is presented separately and not deducted from the asset. Similarly, capitalised interest is seen as too remote for Capital Allowances but can form part of the total cost in the assets.