At Leyton, we completely understand the benefits of using a trusted accountant. That’s why our Capital Allowances experts can work alongside yours, not instead of them.
And the benefits of using Capital Allowances experts are very real. Experts can deliver huge savings for your business, especially if you’ve recently finished any large, complex projects like:
- property development;;
- refurbishment;
- fit-out;
- or if you’ve purchased a building.
In this article, we explain why using specialist Capital Allowances expertise can make a big difference compared to what your traditional accountant can claim for you.
What your accountant can and can’t do for your Capital Allowances claim
Capital Allowances are a form of tax relief, allowing you to write off the costs of qualifying capital assets against your taxable profit. When you buy items like equipment, machinery or business vehicles (i.e., plant and machinery) you can deduct some or all of the value of the asset from your taxable profits, which can give a real boost to your cash flow.
An accountant can make sure that your business claims the obvious Capital Allowances and should be able to help you to file the claim correctly. They usually understand the basics of plant and machinery allowances (PMA) and annual investment allowances and make sure your tax calculations are accurate and submitted on time. For many businesses with straightforward capital expenditure, this is all that’s probably needed.
But because accountants are often generalists, they can’t do everything. For example, the definition of plant and machinery is quite broad, and includes the cost of:
- demolishing plant and machinery;
- adding integral features to a building (e.g, lifts or HVAC);
- some fixtures (e.g., kitchens or bathrooms);
- and building alterations for installing plant or machinery.
The legislation and case law adds an extra layer of technical complexity, which traditional accountants rarely have the internal resources or knowhow to tackle. While they can still claim the obvious capital allowances and they’d be technically correct, certain assets might be missed so you won’t be claiming for the full amount of tax relief that you’re entitled to.
For projects with large capital expenditure, this could mean missing out on huge savings – sometimes millions of pounds. For example, we helped a children’s care homes provider claim £4.5m in tax relief on a £25m portfolio, and a pharmaceutical company claim £2.3m on a £10m+ factory extension. In both cases, their existing advisors had missed significant qualifying expenditure.
How Capital Allowances experts can maximise your tax relief
Large construction, fit-out or refurbishment projects tend to produce huge amounts of invoices, which lack the detailed information that’s often needed to work out if a cost qualifies for Capital Allowances. An accountant who relies mainly on a fixed asset register may not have the expertise or tools to dig into the data for optimising the claim.
Capital Allowance experts will have in-house surveyors and experience of similar projects, allowing them to carry out detailed site surveys and line-by-line cost reviews to find qualifying expenditure that might otherwise be missed.
There are even certain circumstances where you can claim Capital Allowances on property purchases (even if those acquisitions took place a number of years ago), and we’ve found that many accountants are often just not aware of this. For example, we worked with a real estate investor to review a £10m property portfolio, identifying £1.5m in qualifying expenditure on acquisitions they had already made.
Capital Allowances legislation also changes over time, as the government continues to incentivise capital investment. Capital Allowances experts have strong technical knowledge of the changes to legislation and relevant case law, meaning they can apply the lessons from court decisions directly to their work, in a way that a general accountant is unlikely to be able to do.
Capital Allowances support for accountants
Our highly qualified Capital Allowances team includes quantity surveyors, chartered accountants, and tax professionals. We bring this expertise to complement the services of your current accountant.
In fact, many accountants outsource their work to us because they see the value in bringing in dedicated technical experts to support complex claims.
How Leyton can help
Our team of specialist Capital Allowances advisors are here to help you fully optimise your capital allowances so that you can lower your overall tax bill.
If you’re already claiming, our team offer a free health check to ensure that you are maximising tax savings. All we need is the relevant tax computation.
Our process streamlines claims to save time and hassle for our clients. We do this by working directly with contractors when needed, as well as carrying out our own site surveys. We’ll conduct a comprehensive line-by-line analysis of all the project work, presented in a robust report suitable for submission to HMRC alongside relevant tax computations, ensuring a smooth submission process. However, in the unlikely event of an enquiry, we will defend the claim as part of our service.
If you have incurred, or are planning to incur, capital expenditure in property related work or acquisition, it’s worth speaking to the experts. We’ll be happy to help!
Get in touch with a Capital Allowances expert today.
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