June 28th, 2013.
UK business losing billions in unclaimed tax relief
Are you making the most of your capital allowances?
Businesses across Britain are missing out on billions of pounds of savings by not taking advantage of tax allowances on hidden fittings in their commercial property, according to a partner at the accounting firm Deloitte.
While many big and small companies – from fish and chip shops to huge employers – are aware that they can claim tax relief on capital allowances such as carpets, fire extinguishers, radiators, they’re paying more tax than they need to by not including less visible fittings like pipework, cabling, security systems and air conditioning in their accounting.
However, Peter Millwood, a tax partner at Deloitte, said that companies could still claim relief on any unclaimed fittings even if the property was bought with commercial finance ten years ago – although receipts or a detailed analysis of the assets were required to claim the money back and assets can only be claimed for once.
Millwood said that many smaller firms and commercial property investors were deterred off by the “sheer scale of legislation” that they have to contend with. He added: “In most cases, businesses don’t claim as much as they could. There are still many businesses who don’t claim at all…maybe billions of pounds.”
CA Tax Solutions, who are on the UK’s most famous capital allowances specialists, estimate that a typical £1m commercial property will have around £200,000 of unused capital allowances that may be able to claim. What’s more, the company estimates that the average SME with a commercial property could save around £25,000.
There are also a number of companies who operate on a ‘no win no fee’ basis on behalf of companies to uncover and identify areas in which tax relief can be enjoyed.
Have you claimed tax relief on fittings in your commercial property? Are there any hidden parts of your building that you are yet to claim back? If you’ve kept track of your receipts and investments in commercial infrastructure, you may be able to recover thousands from a past tax bill.
For more information about what capital allowances you can claim for, visit HMRC’s dedicated page.