Capital allowances for business property owners

[Charlotte Pearson]

I've just bought my first commercial property and as I'm planning to spend quite a bit refurbishing it I've been looking into what I can claim in capital allowances - anyway I found this which I thought it may be useful to share.

It would be great to hear of anyone else who has experience of claiming capital allowances.

Business owners are being urged to check whether they are eligible to claim tens of thousands of pounds in capital allowances against commercial property they own.

Portal Tax Claim says commercial property owners could be owed billions in capital allowances without realising it.

Under Revenue & Customs rules, when owners spend money buying or improving a property they can offset some of the expenditure against profits or general income.

While most firms are aware they can offset the cost of plants and machinery bought for work, few realise they may be able to claim capital allowances on commercial premises they own, says Shaun Murphy, managing director of Portal Tax Claims, part of claims specialist Portal Group.

For example, firms may be able to claim back tax on items such as air conditioners, lifts and suspended ceilings.

According to Murphy, 96% of firms that own their own properties could be owed a refund at an average of £105,000 a business.

The group operates by sending in an independent chartered surveyor to assess what has been done to a building to turn it from a shell to a workable business premises.

It claims that it typically finds capital allowances worth about 25% of the purchase price of the building.
Portal charges 6% of the sum reclaimed, but only if a successful claim is made. It will also waive its fee if the sum is less than £25,000.

However, a claim such as this can be made on a property only once in its lifetime. This means that if a previous owner has made a claim of this sort then no more claims can be made.

Gary Woodley runs the New Inn, a pub and hotel in Stratford-upon-Avon, Warwickshire. Last year he contacted Portal to see if his family could claim on the property, which they have owned for 20 years.

The inn was bought for £152,000 and the Woodleys successfully claimed capital allowances of 26% of that.

Gary, 48, says: 'We have been hit hard by rising costs, including VAT. This has enabled us to halve our tax bill in January.'