Case Study: Property Developer Missed £850,000 in Allowances. Recovered by HMA Tax.
Capital Allowances are among the most valuable yet overlooked forms of tax relief available to UK property developers. Legislated to encourage investment in commercial property and qualifying assets, they offer a legitimate opportunity to reduce taxable profits and improve post-tax returns, provided they are identified early and claimed correctly.
Despite this, many developers still proceed through the development lifecycle without properly considering their eligibility. The result is often the same: significant tax relief left unclaimed, reduced cash flow, and a missed opportunity to enhance project profitability.
We recently worked with a developer on a £6.2 million mixed-use scheme in the South East of England. The project comprised a ground-floor retail space with 18 residential apartments above. The client, like many others, had been advised that Capital Allowances would not apply due to the predominantly residential nature of the development.
This assumption was incorrect.
Following a detailed site inspection and a review by our surveying team and tax specialists, we identified more than £850,000 in qualifying expenditure. This included plant and machinery such as lifts, air conditioning systems, electrical infrastructure, fire and security systems, and various integral features that had been overlooked.
The first-year tax saving alone exceeded £150,000, and the overall return on investment was materially improved. With that additional liquidity, the developer was able to advance their next acquisition earlier than projected.
This is not an isolated case. Across the industry, Capital Allowances continue to be underutilised due to a lack of specialist knowledge. Developers often assume that claims are only available for landlords with income-producing assets. In reality, allowances can often be preserved, transferred, or even reclaimed depending on how the project is structured and when specialist advice is sought.
Common oversights include relying on general contractor summaries that do not break out qualifying assets, omitting Capital Allowances considerations in contract drafting, or deferring to advisers without the technical expertise required. While retrospective claims are sometimes possible, they rarely deliver the same result as a claim integrated from the outset, especially with further incentives such as Full Expensing and Annual Investment Allowances (AIAs).
Using Capital Allowances are your statutory entitlement. When claimed correctly, they can significantly strengthen your overall financial position and provide a competitive advantage in capital-intensive markets.
At HMA Tax, we work closely with the UK’s leading property developers, legal advisors, and accountancy firms across the UK to ensure that all eligible expenditure is identified, valued, and submitted in accordance with HMRC guidance. Our approach is tailored, strategic, and built on a deep understanding of both property development and tax law.
If you are planning a project, midway through construction, or have completed a scheme in the past few years, there may still be value to unlock.
Contact HMA Tax today to assess your eligibility and ensure no allowances are left unclaimed.
