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Veritas Supporting Charitable Causes

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.

01 Oct 2021

Written by: David Gibson

Offshore Investors Sitting On Significant Tax Relief

Unbeknown to many investors they are likely to be sitting on significant unclaimed capital allowances within their existing portfolio which can be used to mitigate the future increased tax liabilities under the UK tax legislation.

27 Sep 2021

Written by: Clive Curd

Using Artificial Intelligence for Capital Allowances

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.

27 Sep 2021

Written by: Clive Curd

Archive

 

Latest News

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.

Offshore Investors Sitting On Significant Tax Relief

27 Sep 2021

Unbeknown to many investors they are likely to be sitting on significant unclaimed capital allowances within their existing portfolio which can be used to mitigate the future increased tax liabilities under the UK tax legislation.

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

New Case Law – Gas Storage

25 Apr 2021

A case Cheshire Cavity Storage 1 Limited and (2) EDF Energy (Gas Storage Hole House) Limited v The Commissioners for HM Revenue and Customshas been determined at the Upper Tax Tribunal (UTT).  Does a cavity formed to store gas satisfy the requirements to be allowed as plant?

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.

The last non-resident landlord income tax return was filed for the period ending April 2020, with the regime now under UK corporation tax. With the impending tax rates increasing to 25% it is inevitable property investors will be paying more tax, not only on rental income, but also on the profit on a future sale of their property.  Previously no capital gains tax on disposal was required.

However, unbeknown to many investors they are likely to be sitting on significant unclaimed capital allowances within their existing portfolio which can be used to mitigate the future increased tax liabilities.

Often non-resident landlords have not claimed capital allowances as they were of little benefit. However, the change in tax regime now presents an opportunity to investigate potential claims on historic expenditure within the current portfolio including the original acquisition and subsequent capital spends, as well as capturing any 130% super deduction on new expenditure.

Plant and Machinery Allowances can be disclaimed in both pools and carried forward for future use. Delaying a claim to the year of disposal will only allow the taxpayer to claim 1 years of writing down allowance, rather than each year since expenditure.

For example, an investor disposes of a property, and after other deductions has a profit subject to corporation tax of £1million and a tax liability of £250,000.

Claiming £1million of historic plant & machinery allowances at the current 18% reducing balance basis will reduce the taxable profit by £180,000 in year 1, saving £45,000 based on a 25% tax rate.

However, assuming the 18% plant and machinery allowances are disclaimed and carried forward over say 5 years prior to disposal, the total accumulated allowances will be £629,260, providing a tax saving £157,315, over three times the saving compared to only identifying the allowances in the year of disposal.

Whilst you can claim on expenditure going back as many years as you want, as long as that asset is still being used in the course of your trade, there is a 2 year time limit for amending previous tax returns. However, if you hold the property for another 3 years you will have 5 years of benefit as per the example above.  On disposal of the asset you must agree with the purchaser the correct contract wording and CAA2001 198 election to retain the benefit of plant and machinery allowances.

Additionally, on new expenditure, even where an entity may not be in a tax paying position it is still beneficial to claim the allowances in year of expenditure, use the first year reliefs available, and potentially increase the losses thus deferring the time in the future when tax will need to be paid.

Please contact your usual Veritas team member to review any historic or new expenditure to investigate any unclaimed tax savings.