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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 latest judgement the Court of Appeal in December 2022 on what expenditure is deemed plant has set aside the Upper Tribunal’s decision that the First Tier Tribunal’s (FTT) ruling was incorrect and that the plant was ineligible and did not qualify for capital allowances.  The case was originally heard in 2019.

The taxpayer, Urenco, incurred £1billion of expenditure on a nuclear deconversion facility, their trade providing enriched uranium.  Most of the expenditure was agreed, however, £192million, in the Tails Management Facility (TMF) was disputed.

There have been many tax cases disputing what is plant, a building, structure, for capital allowances.  Recent cases with HMRC have involved a grain silo (May & Amor v RCC) and a potato store (JTO Griffiths Ltd v HMRC) both cases the Taxpayer has been successful.

Several points have come out of this case, did the FTT take a too narrow approach to what is function and premises.  That the “provision of plant and machinery” even though performing as a premise is also a function as plant.  The definition of a building in its common meaning, considering the appearance, does not necessarily mean it is not functioning as plant.

The TMF facility had to meet safety regulations to provide radioactive shielding. One of the comments was that whilst safety was inherent in a building or structure, that the process could still function efficiently, in theory.  However, in practice the walls and roof acted as a shield from a regulatory basis and therefore were in fact a necessity.  Lastly, consideration was given to the original drafting from Schedule AA1 In 1996, which now is CAA s23 list c, items 1-4, where the drafting of the legislation was found to have an error in the Tax Law Rewrite Project.  The key point expenditure “on the provision” of those items, or merely expenditure “on” them, that is not only the expenditure on the asset in question, but associated costs which of items for the item of plant claimed.

With the current super deduction for plant and machinery at 130%, this latest judgment demonstrates the complexities of determining whether an item can qualify for plant.  No doubt, with the extra tax relief available for the last 2 years, HMRC will be looking even more closely at claims submitted.