What are Capital Allowances?

Capital allowances are a form of tax relief that apply to virtually every business and property investor that has incurred expenditure on commercial property and who holds property as a fixed asset.

Capital allowances

Capital allowances have been around since the 1800s and is currently in legislation as the Capital Allowance Act 2001. They are a standard part of tax planning and are designed to encourage people to invest in their business.

These allowances are based on capital expenditure in your business and are usually claimed by an accountant. We specialise in identifying such capital expenditure on commercial property in which accountants may not have the expertise to analyse. We call these property capital allowances. 

Stuart Rivers Associates cuts through the complexity and delivers a simple, streamlined process that maximises any claim for you. We work together with your professional advisors to provide the best service.

What can be claimed?

Property capital allowances are typically available on commercial property and a few residential properties, including furnished holiday lets, student accommodation and apartment blocks. They are generated from expenditure on fixtures such as heating systems or sanitary appliances and are common to most types of property.

Here are a few examples of typical fixtures that can be claimed:

  • Electrical Systems
  • Hot & Cold Water Systems
  • Ventilation Systems
  • Heating Systems
  • Air Conditioning Systems
  • Fire & Security Systems
  • Sanitary Fittings
  • Kitchen Fittings
  • Data & Telecom Installations

There are many other fixtures that can be claimed on. Get in touch to discuss a specific requirement.

The best time to address capital allowances is in the following scenarios:

Purchase of an existing or newly built property

Construction of a new property

Building alterations, extensions and refurbishments to a property

The expenditure incurred to fit-out a let property by the landlord and / or tenant

What level of tax relief can I expect?

This varies case by case and there are factors that can affect levels of allowances but we expect allowances to range between 10 – 40% of cost/purchase price.

For example, if a limited company acquires an office building for a £1m, we expect there could be allowances between £100k – 400k. For a 25% CT rate, this results in £25k – £100k total tax benefit.

Types of property

Property capital allowances are available only on commercial property, however this covers a broad range of property. If you are uncertain whether your property qualifies then please see the list below:

Bars / pubs / nightclubs

Caravan parks

Care / nursing homes

Cinemas / theatres

Commercial farms

Data centres

Dental practices

Factories

Furnished holiday lets

Garages / car showrooms

Hotels

Industrial shells

GP surgeries

Multi-storey car parks

Offices (business parks)

Residential tower blocks

Restaurants / cafes

Retail parks / supermarkets / shopping centres

Schools / nurseries

Self-storage units

Stadiums

Student accommodation halls / serviced apartments

Veterinary practices

Warehouses (industrial estates)

Wind / solar farms

Types of capital allowances

Your expenditure could qualify for various types of capital allowances:

Plant & machinery allowances (PMA)

Provides tax relief on qualifying fixed plant and machinery.

Structures & buildings allowances (SBA)

Provides tax relief on structural and building work.

Research & development allowances (RDA)

Provides accelerated tax relief on all areas of a property where R&D is carried out.

Land remediation relief (LRR)

Provides tax relief on the remediation/treatment of contaminated land (e.g. asbestos).

Do you qualify for a claim?

1.Are you subject to UK corporation or income tax?

2.Did you (or do you plan to) buy or refurbish a property?

3.Is the property for commercial purposes?

Get in touch

To make a capital allowances claim, the property must be either your business premises or an investment property which you receive an income from.

Contact us
Or call 01937 350001

How our partners can benefit

Find out more about how partners can benefit here

We work with a wide range of partners who are looking to:

  • Develop a new income stream
  • Broaden the service range for clients
  • Increase client retention
  • Benefit from our advice when capital allowances projects are raised by clients
To make an enquiry, click here or call us on 01937 350001

Frequently asked questions

What are capital allowances?

Capital allowances are a form of tax relief for virtually every business in the UK. They provide a type of tax relief that allows businesses and individuals to deduct the cost of certain assets from their taxable income.

Who can claim capital allowances?

Stuart Rivers Associates can help you if you are a UK tax paying individual, company or business that owns commercial property.

How are the tax savings received by the property owners?

We produce a detailed report for submission to HMRC. After our report has been approved by HMRC, the tax savings can be written down over many years or (if available) the amount can be received in full in the first year as a result of using a 100% first year allowance such as the annual investment allowance.

Can landlords claim on expenditure incurred by their tenants?

Only if they have contributed towards the expenditure themselves. We often find that most landlords prefer to grant rent-free periods to their tenants instead, but as a result they miss out on the tax savings that could be made on the contributions.

Can I claim capital allowances for a property purchased several years ago?

Yes, you can. It doesn’t matter when the property was bought. As long you still own the property a claim can be made.

Chris Lonergan

Director

Chris is our commercial lead and is responsible for our relationships with clients, partner firms and other intermediaries. His background spans sales, business development and consulting in several sectors including engineering, construction, professional and financial services.

Chris has been involved with Capital Allowances for over 10 years and has helped hundreds of clients to gain tax relief. During this time he also helped to build a new mid-market accountancy firm out of a larger organisation and spent time with a large specialist tax reliefs business so has good market knowledge and understands how different types of businesses in it operate.

Chris shares Stuart’s philosophy and as part of a specialist business also very much believes in collaboration and joint working with partners to provide the best level of client service and maximised tax benefit.

Philip Rivers

Commercial Manager

Philip joined Stuart Rivers Associates after finishing university and worked hard behind the scenes, learning the ropes of the business.

He now works as a commercial manager involving close liaison with our surveyor team in researching client entitlement as well as helping to develop the business.

Andrew Davies

Director

After working for a major PLC for many years and then working for a local accounting practice, Andrew join Stuart Rivers Associates in 2003.

Andrew has experience in all areas of the business and is currently responsible for the operations team together with the financial management and day to day commercial decisions.

Andrew supports the philosophy of the business and ensures the high quality service that has been built up over the years is not only maintained but developed further to mee the ever changing needs of our clients and joint working partners.

Stuart Rivers

Senior Partner

Stuart is a chartered Quantity Surveyor who formed Stuart Rivers Associates in 1993 after having worked for major national surveying practices where he first encountered Capital Allowances. 

Stuart quickly developed the practice into one of the country’s leading specialist Capital Allowance consultancies providing advice to not only major accountancy practices but also to investors, developers and building owners no matter the size of the business or whether they owned a single building or a large portfolio of property.

 Stuart’s philosophy, which runs through the core of the company, is to provide a service to clients that is accurate, comprehensive, and effortless but above all generates plenty of tax relief.

Consultancy

Whether you are buying or selling we can provide appropriate clauses for the sale and purchase agreement to safeguard potential capital allowances and also advise a potential value of Capital Allowances for negotiation purposes. 

Construction expenditure

We can analyse both current and historic construction expenditure from the available information to ensure you gain the appropriate Capital Allowances from your expenditure. 

For example: 

The refurbishment of an existing building for £1 million could generate between £300,000 and £700,000 of tax relief. 

Property purchases

When acquiring a property either from a developer or a previous owner, we can identify and assess the Capital Allowances you may be entitled to. 

For example: 

A commercial property bought for £1 million could generate between £100,000 and £400,000 of tax relief depending on the type of property. 

It is still possible to claim Capital Allowances on property bought many years ago!

Get in Touch