James Telling, Head of Development and Acquisitions – 17th May 2021

A Birmingham based corporation has had a pleasant surprise this month, as they have been able to claim millions of pounds in capital allowances across their commercial property portfolio, at a time when the sector has been experiencing one of its toughest 12 months on record.

The owner of a 6-floor office complex, who asked to remain anonymous, was able to make a capital allowance claim based upon the embedded assets held within the building.

These items are considered to be part of the property, and are referred to as plant and machinery items. These typically include items such as elevators, climate control, wiring, plumbing and fit outs for office buildings.

“We received an email from HMA Tax in April, and we quickly discovered that we were sitting on upwards of £1.2m of allowances, we knew this was something we couldn’t ignore, particularly with our strategic focus of a post-covid recovery”

With COVID-19 restrictions easing, many commercial property owners are looking to improve their cashflow, find efficiencies and start to bring life back into their businesses.

Duncan Chittick, Director, explains:

“Embedded capital allowances claims remain one of the most under-utilised tax incentives for commercial property owners in the UK.

“With the high barriers of entry for commercial property ownership in the UK, Capital Allowance Act 2001 should always be considered when buying or selling commercial property. Fortunately claims can be made retrospectively, and typically produce a tax rebate, as well as ongoing relief”

In the case of capital allowance claims, you will need a specialist team to determine the qualifying items embedded in the property, as well as a team with an understanding of the complex tax rulings surrounding the The Capital Allowance Act 2001. All of these skills need to be applied by a capital allowance expert for a efficient, maximised and valid claim.

If you own a commercial property and would like to find out more how your business could improve their tax situation, please call James Telling, Head of Development and Acquisitions on 01384 904090 or email james@hma.tax for more information.