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Veritas Article in Property Week Magazine

As part of the Property Week magazine Covid-19 support hub Veritas Advisory director Nolan Masters highlights how using Capital Allowances can help generate significant tax savings and ease cash flow problems.

08 Jun 2020

Written by: Nolan Masters

Veritas Article in Taxation Magazine

Veritas have published an article in Taxation Magazine setting out how to boost cash flow by identifying property tax reliefs. Key points addressed in the article include reviewing historic expenditure where allowances haven't been fully claimed, using capital allowances to mitigate future capital gains, the window of opportunity to claim and the benefit of utilising the annual investment allowance of £1,000,000.

03 Jun 2020

Written by: Nolan Masters

Capital Allowances Guide for PAI Member Firms

Veritas Advisory director Clive Curd has prepared a Capital Allowances guide for all member firms of the Independent Commercial Property Agents Network (PAI) for which Veritas Advisory are the recommended Capital Allowances advisor.

01 Jun 2020

Written by: Clive Curd

Archive

Latest News

Veritas Article in Property Week Magazine

08 Jun 2020

As part of the Property Week magazine Covid-19 support hub Veritas Advisory director Nolan Masters highlights how using Capital Allowances can help generate significant tax savings and ease cash flow problems.

Veritas Article in Taxation Magazine

03 Jun 2020

Veritas have published an article in Taxation Magazine setting out how to boost cash flow by identifying property tax reliefs. Key points addressed in the article include reviewing historic expenditure where allowances haven't been fully claimed, using capital allowances to mitigate future capital gains, the window of opportunity to claim and the benefit of utilising the annual investment allowance of £1,000,000.

Capital Allowances Guide for PAI Member Firms

01 Jun 2020

Veritas Advisory director Clive Curd has prepared a Capital Allowances guide for all member firms of the Independent Commercial Property Agents Network (PAI) for which Veritas Advisory are the recommended Capital Allowances advisor.

4 Simple Steps to Reduce Income Tax

27 May 2020

The practical aspects of partnerships and individuals claiming on historic expenditure, if there are any time restrictions to submit a claim and how to overcome potential barriers such as lack of supporting detailed cost information are often unclear. We set out 4 simple steps to follow in order to realise these tax savings

4 Simple Steps to Reduce Corporation Tax

27 May 2020

Companies are often unclear on the practical aspects of claiming against historic expenditure, if there are any time restrictions to submit a claim and how to overcome potential barriers such as lack of supporting detailed cost information. We set out 4 simple steps to follow in order to realise these tax savings

Veritas Support Dog Rescue Charity

27 May 2020

Veritas Advisory have chosen to be a supporter of Candy Cane Rescue, a charity rescuing exported greyhounds and other dogs from the meat markets in China, and for which Veritas Director David Gibson is a Trustee.

Property Agents Independent (PAI) Network Blog

15 May 2020

During the unprecedented pandemic we shared our views to the Property Agents Independent (PAI) network on how to aid businesses by enhancing cash reserves through the claiming of capital allowances on unclaimed historic property expenditure.

It’s Not Too Late For Some – Further Claim Opportunities

23 Jan 2020

If you are reading this and thinking it’s too late we already completed on a deal there may still be some available capital allowance claims which can be pursued, even if the contract is silent or an election for £2.00 has been signed up to. Here we set out further claim opportunities, irrespective of contract.

Don’t Look Back In Anger – How To Avoid Missing Out

23 Jan 2020

Whilst there are capital allowance claims that can still be pursued irrespective of the adopted contract position, missing out on valuable tax relief is likely unless key capital allowance due diligence checks and contract provisions are set out before exchange. Here we set out some of the key tasks to avoid losing out.

Glais House Care Limited v The Commissioners for Her Majesty’s Revenue & Customs

We were surprised by the content of this case, the relatively low values to take a case to Tribunal, and the error in entitlement, eligibility, apparent valuation methodology plus also the contract of sale which ignored the facts of the values involved. There is no mention of who prepared the claim, only that is was the accountant who instructed counsel for this client.

In summary, this is a case about the valuation of the allowances on the perceived simple acquisition of a care home. In addition to the claimant not recognising legislation restrictions on the value of the claim the vendor had also submitted a claim on items that were ineligible.  The result was a reduction in the claim from £318,792 to £254,602.

This case covers many aspects of the Capital Allowances legislation, but fundamentally is that to make a claim a tax payer must claim in accordance with the legislation.  However, it is complicated, and emphasises the point that specialist advice should be taken to reduce the risk of ending up in a lengthy and costly exercise in court, over what is a relatively small amount of benefit in the resulting decision.

There were errors in the claim preparation by both the vendor and purchaser, as well as in the sale contract.  First, that there was not enough due diligence during the acquisition to establish the vendors position, and that this should have been agreed and a CAA2001 S198 entered into the contract.  It also demonstrates that attaching a figure in a contract for “equipment” does not hold HMRC to agree to that figure, as in this case they did not.

The vendor made a claim for £220,454, including cold water, which they were not entitled to as the legislation specifically excluded this item.  “I would note cold water may have qualified if it was argued as an item of plant for the specific use of the trade”. The purchaser submitted a claim based on their purchase price for £318,792, less the equipment figures, but also included correctly “an overage” claim for cold water and electrics installation, being the first tax payer to incur expenditure after the introduction of integral features in 2008.  The issue is that you are often restricted to a previous claim and this was not considered.

A point was also made that the claim was calculated by valuing the fixtures and applying an index.  It was reported The Valuation Office Agency used a different basis, which we assume to be the recognized formula for an apportionment, and it just so happened to come out to the same figure.  If it had not, there would have been a further issue regarding the valuation.

The parties at the time of the property sale agree to allocate £35,000 to equipment, however, under the capital allowances calculation this figure was £18,458, and the figure overruled by HMRC.  The reason being that the value transferred can only be the maximum amount claimed by the vendor, a figure half the value in the contract.

The case demonstrates that whilst the HMRC had just cause to dispute the figures, and do check capital allowances claims, it is also reported they acted unreasonably during the proceedings, going back on previously agreed values.  This case emphasises the importance to use an experienced Capital Allowances advisor who has dealt with HMRC and the Valuation Office, as well as the Tribunal, to ensure a favourable outcome without incurring avoidable expensive costs.