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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

Hora Tevfik v HMRC

Another recent case law on Capital Allowances highlighted HMRC’s position on two main points.

1. HMOs (Houses of Multiple Occupation) do not qualify for Capital Allowances
2. Insufficient supporting information for a claim can enable HMRC to raise an enquiry beyond the normal time limits.

1. HMOs do not qualify for Capital Allowances.

HMOs do not qualify, a long held view of ours since we were involved in the original HMRC briefing 66/01 and 45/10; it didn’t though stop a number of advisors pursuing claims on HMOs and which effectively gave rise to this latest ruling.

To clarify the position, a house which has been converted to bedsits, but has a ‘communal’ area of a kitchen, living room etc. such as an HMO, is still part of a dwelling house and therefore does not attract capital allowances. Blocks of flats however, with common areas such as basements, stairs and lifts do attract Capital Allowances, excepting the new Structural and Buildings allowances; yet another complication for taxpayers!

2. Insufficient Information to support a claim can enable HMRC to raise an enquiry

HMRC’s normal time limit for making an enquiry into a tax return that has been filed on time is one year from the filing deadline.

However, where there is insufficient information to determine the validity of a Capital Allowances claim, as there was in this case, HMRC has the power to make ‘discovery assessments’ to prevent loss of tax; this can be 4 years after the end of the relevant tax year, or where someone has deliberately not provided information, up to 20 years after the end of the relevant tax year.

Consequently, HMRC were able to raise an enquiry into the HMO claim made by Hora Tevfik even though the normal time limits had expired.

A common question we are asked by our clients is should we include your capital allowances claim report within the tax return? Our view has been yes, on this very basis that it is a valuation of tax allowances and that providing the report discloses sufficient detailed information to allow HMRC to make a reasonable judgement as to whether or not they make further investigations.

The case brought up several other interesting points, known already, but which are nevertheless useful to remember when preparing a claim:

1) that the burden of proof is on the taxpayer to establish the expenditure is qualifying
2) evidence of a property survey and specific identification of a plant and machinery can be used to substantiate any claim
3) using a professional advisor who provides a detailed report can provide added certainty to clients beyond the normal time limits for making an enquiry

Veritas Advisory Directors are recognised by HMRC and experienced across all property sectors including thousands of student accommodation and residential blocks with non-dwelling elements, using successful techniques that maximise the claims in accordance with the Capital Allowances legislation.