Insights
Seminars & Events
News

Latest Insights

Case Law – Mersey Docks & Harbour Company v HMRC

HMRC continue to raise enquiries and to disallow items of plant that could be used for a claimant’s trade. This case relates to the quay wall at the Port of Liverpool

14 Jan 2025

Written by: Clive Curd

Case Law – Changi Airport Loses $273m Tax Break

Changi Airport Group (CAG) made Capital Allowances claims over three years totalling $272,575,162 on assets including the runways and taxiways but lost with the Court of Appeal determining that the assets were structures and not tools of trade.

20 Dec 2024

Written by: Tom Lo

Furnished Holiday Lets – HMRC Clarify Legislation

The window to claim Capital Allowances tax relief on furnished holiday lettings (FHLs) is fast decreasing before repeal of the legislation in April 2025 and HMRC have now clarified the transitional rules about who can or can't claim.

07 Nov 2024

Written by: David Gibson

Archive

 

Latest News

Case Law – Mersey Docks & Harbour Company v HMRC

14 Jan 2025

HMRC continue to raise enquiries and to disallow items of plant that could be used for a claimant’s trade. This case relates to the quay wall at the Port of Liverpool

Case Law – Changi Airport Loses $273m Tax Break

20 Dec 2024

Changi Airport Group (CAG) made Capital Allowances claims over three years totalling $272,575,162 on assets including the runways and taxiways but lost with the Court of Appeal determining that the assets were structures and not tools of trade.

Furnished Holiday Lets – HMRC Clarify Legislation

07 Nov 2024

The window to claim Capital Allowances tax relief on furnished holiday lettings (FHLs) is fast decreasing before repeal of the legislation in April 2025 and HMRC have now clarified the transitional rules about who can or can't claim.

New Case Law – Capital v Revenue

04 Oct 2024

A recent important Supreme Court decision in Centrica Overseas Holdings Limited v HMRC addresses the deductibility of expenses incurred by a company. The bar to deduct costs has been raised considerably

HMRC To Increase Scrutiny on Capital Allowances Claims

04 Oct 2024

Not only are Allowances more advantageous than ever before, but HMRC are strategically targeting tax leakage – including through Capital Allowances. Getting the correct advice is essential

100% Full Expensing – What is it and why it’s important

09 Sep 2024

Hailed as the “Greatest Tax Break in History” when it was introduced in 2021, the 130% Super Deduction aimed to take some of the sting away from the hike in Corporation Tax rate that was announced in the same speech. Its replacement, Full Expensing (FE), took over in April 2023 as a slightly less headline-grabby 100% First Year Allowance. But what is it?

Some Good News for Furnished Holiday Let Owners

05 Aug 2024

Positive transitional rules have now been published allowing Furnished Holiday Let owners the ability to use Capital Allowances beyond April 2025

Case Ruling – HMRC v Altrad Services Limited

10 Jul 2024

The decision by the Court of Appeal will have far reaching implications in that it clearly resets the boundaries of what is a capital allowances avoidance scheme designed to increase the quantum of capital allowances claimed

Spring Budget Update

06 Mar 2024

Chancellor Jeremey Hunt announces changes to the capital allowances legislation affecting furnished holiday let owners

ESG (Environmental, Social, Governance) is a framework to assess a business’ appetite for its green and social responsibility. We have increasingly seen commercial property investors aligning investment decisions with their ESG ambitions.

For property investors this means pursuing buildings which are energy efficient and those that provide spaces with the occupiers’ mental wellbeing in mind.

One of the tools used by Government to advance the environmental aspect of ESG is the introduction of the Minimum Energy Efficiency Standards (MEES). MEES sets the energy efficiency standard of commercial properties with an Energy Performance Certificate (EPC) rating.

This is set to increase from E to B by 2030 as a result property investors are undertaking significant capital investments in either refurbishing existing properties or developing new properties which are compliant.

Capital Allowances Opportunity

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.

Currently you have the Annual Investment Allowance (AIA) of £1m which is available to individuals and corporates to write-off 100% of qualifying capital expenditure in the first year up to a limit of £1m, providing a potential tax saving between £450k (45% personal tax rate) to £250k (25% corporate tax rate) respectively.

For corporates there are further First Year Allowances (FYAs) such as the 100% Full Expensing and 50% Special Rate Pool FYA, both allow for 100% and 50% write-off of qualifying capital expenditure in the first uncapped, respectively. The FYAs are in place until March 2026.

Front End, not Back End, Capital Allowances Considerations

Capital Allowances, despite their enormous potential to reduce the net cost of capital projects, are still rarely considered at the outset of a project, or in value engineering exercises, but rather only on completion when less scope is available to maximise the tax efficiencies. Many companies or individuals incurring the expenditure still do not claim Capital Allowances at all.

Bringing forward consideration of the Capital Allowances, seeking advice from a Capital Allowances specialist, will only help reduce project costs, and in some cases, can make a project viable.