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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 accelerated 130% super deduction and new 100% full expensing capital allowances are set to drive an increase in HMRC enquiries into Capital Allowances claims, increasing the importance of preparing fully substantiated claims, supported by case law and legislation.

In March this year HMRC started to issue ‘nudge letters’ to companies who have claimed the 130% super deduction and 50% special rate allowance prompting companies to check their basis of claim for these first year allowances with an initial focus on leasing restrictions and companies with an accounting period straddling 1 April 2021.

Nudge Letters – What are they?

It is a cost effective form of communication by HMRC sent to taxpayers who HMRC believe have a tax issue to disclose. HMRC have recently targeted Research and Development Claims which offer significant accelerated tax reliefs, and it is expected there will be a similar push for Capital Allowances claimants who have and will benefit from the new 100% full expensing allowances, in addition to the super deduction claims.

It is also expected that HMRC will open enquiries into those that do not respond or make a full disclosure.

HMRC are requesting companies to provide evidence of the asset purchase contract, when the asset was brought into use, correspondence or the date when the supplier was first approached, delivery dates, copies of invoices etc.

This emphasises the importance of a robust claim report and the need to disclose this within the relevant tax return; a blanket claim approach will not be adequate.

Veritas Advisory recommend using an experienced specialist capital allowances advisor as this avoids any pitfalls in claiming the first year allowances, ensures the tax savings are maximised, and ultimately is able to withstand an HMRC enquiry being raised into your tax return.