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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.

The new Structures and Buildings Allowance and the increase to the Annual Investment Allowance were the main Capital Allowance headlines from Budget 2018, but here we set out some further significant changes for businesses and investors to take note.

The Chancellor announced that from 1 April 2019 the rate of relief for Special Rate Pool will be dropped from its current 8% per annum on a reducing basis to 6%.  This is to align the rate of relief more closely to the useful life of the assets on which it is claimed.

For chargeable periods which straddle 31 March 2019, there will be the requirement to calculate and apply a hybrid rate for the transitional period.  For most SME’s this change will have little impact, as it is more than compensated for by the increase in the Annual Investment Allowance to £1m.

Since 2001, businesses and investors have been able to obtain an accelerated rate of relief of 100% in the year of expenditure for certain energy efficient or water saving technologies.  From 1 April 2020 this enhanced relief is to be removed along with the ability to claim tax credits for those in a loss making position.

In addition, the current products as manged by the Carbon Trust are to be revised.  For any ongoing or planned expenditure up to 1 April 2020, clients should check and ensure that the suppliers of those potentially qualifying products are made aware of the changes to the qualifying criteria.  If necessary, relist their products or check that they meet the performance criteria so that the necessary qualifying certification can be obtained to allow the client to obtain the enhanced allowances.

As projects get closer to the 1 April 2020 deadline, consideration will also need to be given to the point as to whether qualifying expenditure has been incurred before the abolition date and so supply contracts will be crucial to determine the position.

Finally, in a recent Capital Allowances case of SSE Generation Limited vs HMRC, it considered and, in some cases, allowed Capital Allowances to be claimed on alterations to the land.  New legislation has now been drafted and takes immediate effect from 29 October 2018, allowing the claiming of Capital Allowances for costs for altering the land, only where its purpose is for the installation of qualifying plant and machinery.

This legislation change intends to clarify the fact that alterations to land, to the extent they do not relate to the installation of plant and machinery, cannot be claimed as normal plant and machinery allowances.  It does also confirm that the new Structures and Buildings Allowance will, however, provide tax relief for land alterations connected to the construction of structures and buildings.