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Short on Time? Super Deductions in Brief

For those short on time, we have provided a bullet point summary of the key points, who can claim and considerations when claiming.

20 Apr 2021

Written by: Nolan Masters

Are Property Investors Invited to the ‘Super-Deduction’ Party?

The fanfare surrounding the announced ‘super-deductions’ was somewhat soured for property investors, in reading of a restriction on ‘leased’ plant and machinery.  Here we set out why for some investors, there is still a way to benefit from these generous temporary tax reliefs.

20 Apr 2021

Written by: Nolan Masters

Claiming Super Deductions – Benefit & Restrictions

In an unexpected offer of generosity, as part of the Chancellor’s spring budget, temporary ‘super’ capital allowances were announced with a view to kick start the post covid recovery.  Here we set out the requirements for making a claim and the benefit on offer.

20 Apr 2021

Written by: Nolan Masters

Archive

Latest News

Short on Time? Super Deductions in Brief

20 Apr 2021

For those short on time, we have provided a bullet point summary of the key points, who can claim and considerations when claiming.

Are Property Investors Invited to the ‘Super-Deduction’ Party?

20 Apr 2021

The fanfare surrounding the announced ‘super-deductions’ was somewhat soured for property investors, in reading of a restriction on ‘leased’ plant and machinery.  Here we set out why for some investors, there is still a way to benefit from these generous temporary tax reliefs.

Claiming Super Deductions – Benefit & Restrictions

20 Apr 2021

In an unexpected offer of generosity, as part of the Chancellor’s spring budget, temporary ‘super’ capital allowances were announced with a view to kick start the post covid recovery.  Here we set out the requirements for making a claim and the benefit on offer.

Veritas in AI Collaboration with Brunel University

30 Mar 2021

Following a recent application through Innovate UK Veritas Advisory, together with Brunel University London, are developing AI-assisted technology to aid SMEs to more efficiently collect and categorise data for tax assessment and tax relief

New 130% Super Deduction Explained

06 Mar 2021

Veritas have been in direct correspondence with HMRC with regards to the new 130% Super Deduction and specifically how it is applied on leased assets. Despite initially appearing as an exclusion on all leased assets, which would encompass most investment properties, there are opportunities to claim the new allowance.

Capital Allowances on Freeports

15 Dec 2020

The Government have issued the responses to the Freeports Consultation, originally published in February 2020, and will offer Enhanced Capital Allowances in Freeport Tax Sites plus a Freeport-specific, Structures and Buildings Allowances.

Society of Trust & Estate Practitioner (STEP) Webinar – Jersey Branch

12 Dec 2020

Veritas Advisory Directors Clive Curd and David Gibson presented on Capital Allowances to the members of STEP Jersey, highlighting the increased importance of Capital Allowances to offshore investors, and how to maximise the potential tax reliefs available including tax planning for future liabilities such as Capital Gains Tax.

£1,000,000 AIA Extended for 12 Months

13 Nov 2020

In a positive move the Government has today announced that the current Annual Investment Allowance (AIA) of £1,000,000, which was due to revert down to £200,000 on 1 January 2021, will be extended for a further year to 1 January 2022.

Veritas Open Liverpool & Manchester Offices

18 Sep 2020

We are pleased to announce the opening of two offices in Liverpool and Manchester to strengthen our existing offering and provide a local presence to both existing and new clients.

It has taken HMRC a year since the Structures and Buildings Allowance (SBA) was announced in the November 2018 budget to publish the detailed guidance on its new tax give away for capital expenditure on all non-residential buildings, whether they are built from new, extended, tenant fit out, or refurbished.

The estimated cost to the Treasury, or put it another way, the amount the taxpayer can save in 2019-2020 is £165million, and HMRC will spend £17million to put their systems in order to cope with this change!

Is it worth it?
The tax relief is 2% of the qualifying expenditure leading some clients to question whether this tax allowance is worth the effort of making a claim?

Perhaps the response is do you want to pay less tax or potentially disrupt a future sale by not having the relevant information to hand to transfer to a Buyer? The allowance rate may only be 2% but on a £10m industrial development the allowance is worth about £350,000 in tax savings over ten years, not something to be sniffed at.

Additionally, because of the interaction between the SBA and capital gains on sale, it is now more important than ever to use a specialist with the appropriate skills to value and maximise the plant and machinery allowances thereby reducing potential future gains.

Guidance Note Explanations
The guidance notes have provided some further explanation on the following points:

  • An SBA allowances statement must be maintained but does not have to be routinely disclosed to HMRC. However, as demonstrated by the recent Hora Tevfik v HMRC case it is beneficial for the taxpayer to submit the statement to HMRC, otherwise there is a risk of enquiry beyond the normal time limits.
  • Where no construction contract exists, maybe because in-house, or an agreement, HMRC clarify that an email exchange would satisfy the evidence required
  • How to calculate the SBA figure where a project has both qualifying and non-qualifying use, or is constructed in multiple phases
  • Definition of residential us; although the SBA definition of residential is different to that used for plant and machinery allowances. So what evidence is required to substantiate a claim?

What evidence is required to substantiate a claim?
Unless the following is provided the SBA claim is NIL:

  • Evidence of construction expenditure incurred
  • Relevant documents to support the date of earliest construction contract
  • Calculations of their just and reasonable apportionment (where purchase price is the relevant expenditure)
  • Date of first use, for the purpose of an SBA claim

Definition of Residential
The definition of residential is defined, but perhaps has confused the definition compared to other allowances, namely plant and machinery.

  • Hotels qualify, but aparthotels do not
  • Care homes qualify for P&M, but old age, and self-contained without personal care do not
  • Furnished holiday letting qualify for P&M but not for SBA.
  • Residential common areas qualify for P&M, but not for SBA.
  • Structures in residential common areas qualify for P&M, but not for SBA.

Potential issues for the calculation
There are added complications in calculating the allowances, especially on multi-let properties undergoing refurbishment programmes and mixed use developments, but on all projects we envisage potential issues arising from ensuring that the basis of the calculation is correct and excluding from the calculation any of the following:

  • Certain architect fees
  • Planning fees
  • Expenditure which could qualify for land remediation relief
  • All expenditure that could qualify for plant and machinery and integral features
  • On costs to various packages including professional fees

The new SBA is a welcome relief and a valuable one particularly where properties are held over a number of years. For any queries on the legislation then contact one of the Veritas Directors.