Capital Allowances

What are Capital Allowances?

Capital allowances are expenditures that can be claimed by businesses against their taxable profit. They can be claimed on most assets purchased by the business, and fall under different qualifications, which determine the value that can be claimed back on them. 

While some of the expenditures can be deducted from the taxes in the year in which they were made, others are spread over multiple years. The capital allowance claim should be included in the tax return, which is submitted to HM Revenue & Customs. Often accountants and solicitors may lack the time and expertise to identify specific capital allowances and claim them. 

CapEx Associates can help your business identify and claim capital allowances, ensuring that you gain maximum annual profit.

More than half of UK businesses don't claim their entitlement to capital allowances

Don't miss out! You could be saving tens of thousands of £

What can I claim capital allowances for?

Your business can claim capital allowances on various expenditures including vehicles (cars, vans, trucks) and equipment required to complete work. 

 

R&D costs are also part of the capital allowances that can be claimed. Two common capital allowance types claimed by UK businesses are annual investment allowance (AIA) and the first-year allowance. 

 

Items which cannot be claimed through capital allowances include structural parts (doors, windows), stationery, leased items and items used for entertainment.

Accountants

Many Accountancy Practices work with Capital Allowances on a daily basis.

However, identifying Embedded Capital Allowances from the original purchase price takes a specialist team with a detailed knowledge of statute and case law, as well as a high level of expertise at the surveying stage to break down the qualifying and non qualifying elements of a building. 

 

From our Solihull office, CapEx Tax have collaborated with some of the leading accountancy practices on a daily basis to deliver in our specialist area of Capital allowances on behalf of them.

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Solicitors

Solicitors are under pressure to complete more and more detail at the conveyancing stage.

This includes the need to complete section 32 of the CPSE (Commercial Property Standard Enquiry). Section 32 deals with Capital Allowances and whether the current owner has claimed for any 'embedded plant and machinery’ within the building.

CapEx Associates provide the perfect solution to this by using our team of capital allowance experts to complete the Capital Allowance section of the CPSE on your behalf. We do this whether you are acting for the buyer or seller, regardless of your business location within the UK.

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How to Claim Capital Allowances

In most cases, any item with a lasting benefit to the business can be classified as a capital expenditure. These assets are then treated as a business expense to reduce your taxable profit within your basis period.

 

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Frequently Asked Questions

I am a property developer; can I claim capital allowances on commercial properties?


Property developed and held as trading stock will not qualify for capital allowances claims. However, capital allowances can be claimed if the property is subsequently moved to fixed asset investments on the balance sheet.




When can I claim capital allowances?


Capital allowances must be claimed in the accounting period you bought the item if you want to claim the full value under:

  • annual investment allowance
  • first year allowances
If you do not want to claim the full value, you can still claim part of it using writing down allowances at any time as long as the item is in your ownership. If you buy something under a hire purchase contract you can claim for the payments you have not made yet when you start using the item. You cannot make a claim on the interest payments.





Cap Ex Associates Tax Ltd

The Barns

Barston Gate Farm

Barston Lane

Barston

Solihull

West Mids B92 0JN

Tel:  0121 272 0801

Email:  lee.bould@capextax.com

Company number: 11166174

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