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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 increasing complexity of the Capital Allowances legislation, differing allowances available specific to building uses or certain taxpayers, the introduction of Structure and Buildings Allowances, the timing restrictions on allowances qualifying for 130%, 100% or 50% and the various rules on disposal have created layers of difficulty in calculating and maximising capital allowances tax relief.

The ‘complexity’ issue results in tax incentives being both under and overclaimed, incorrectly categorised or not being claimed at all!

One way to part overcome this is the use of artificial intelligence. 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.

Put simply, capital allowances is a process of coding expenditure to the correct category, interpreting the relevant legislation at date of expenditure, applying the prevailing rate of allowance, calculating the “pool” of allowances entering the figure into the tax return to reduce taxable profits resulting in paying less tax.

However, rarely do construction projects and ledgers provide data in a tax friendly format or in sufficient detail to maximise a claim and it is not possible to identify qualifying expenditure ancillary to the installation of plant and machinery merely by reviewing contract documents. Unless a Capital Allowances advisor is appointed to analyse the data in detail significant tax relief will remain unidentified and unclaimed.

As part of our team, we have data scientists to develop a software application using the latest technology to help both the SMEs and their advisors to create a more accurate, and efficient claim process for tax reliefs.  Adaptation to change will be part of the process and the accuracy of the outputs will increase over time by using blockchain technology.  Together with industry advances in the data, future incentives will be better applied so they are directed to the specific investment.

In the coming months we will be looking for partners to assist us in testing and piloting the process; please contact Kwang-Sung Chun to register your interest on [email protected].