It’s time to review your capital allowance claims or you may miss out…

Jeannette McLellan Tax Partner at Bevan and Buckland
Jeannette McLellan

Around 96 per cent of commercial properties in Wales qualify for capital allowances under the current criteria but if new reforms that are being proposed are brought in the window for claiming the tax allowance will be significantly reduced. Currently businesses that own or have refurbished a property, have been able to claim for their capital allowances – significantly assisting to recoup the cost of the initial payment of the purchase value.

But if new HMRC consultations are agreed which could take effect from April 2012 – the window in which to claim for capital allowances will significantly reduce from the current unspecified period down to less than two years from the date of purchase.

I would urge all businesses who own their own property, or who have carried out work to refurbish their premises, to take a close look at what they can recover under the capital allowances process. In many instances businesses have been able to recoup between 25 and 50 per cent of the initial purchase cost, which is a substantial assistance in running any business. Here’s an example of how one of our clients maximised their capital allowances.

At the moment HMRC guidelines allow businesses to reclaim costs at any time, as long as the business still owns and is using the asset. Under the new recommendations a one to two year window to claim will be introduced, along with more stringent recommendations on how plant and machinery transactions can be claimed.

Essentially, businesses need to act now to ensure that any relevant claims can be lodged before the proposed changes drastically reduce the availability of this claim procedure. I would strongly advise that businesses contact a qualified capital allowance claim expert to enquire about their eligibility.

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