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99 Problems but Tax Relief ain't 1!

There are currently more than 1,000 tax reliefs in the UK and these reliefs are designed to help maintain the competitiveness of the tax system whilst governments use these reliefs as a mechanism to redistribute wealth, support economic growth and influence behaviour.


Tax reliefs (when designed properly) can be used for practical reasons such as establishing the correct profit for tax purposes and this is true with capital allowances, one of the biggest tax breaks for commercial property and business owners in the U.K.



Capital allowances are a form of tax relief for businesses in the U.K and they allow a tax deduction for the cost of certain assets that are used for business purposes, such as buildings, machinery, equipment, and vehicles. The purpose of capital allowances is to encourage businesses to invest in capital assets, which can increase productivity, efficiency, and to stimulate economic growth.


To claim capital allowances on a commercial property, the property must be used for the purposes of the trade, the business be applicable to U.K taxation, has incurred qualifying capital spend and has a qualifying trade. The amount of the allowance will depend on the type of asset and the period of time over which it is used. For example, some assets may qualify for 100% capital allowances in the year they are acquired, while others may be subject to writing-down allowances over several years.


Properties such as offices, retail units, warehouses/industrial units, care home, hotels, holiday lets, apartment blocks and more all qualify as long as the business/property meets HMRC criteria.


Commercial property owners should consider claiming capital allowances for several reasons:

  1. Tax Savings: Capital allowances can provide significant tax savings for commercial property owners by reducing their taxable profits and ultimately the amount of corporation tax they have to pay

  2. Improved Cash Flow: By reducing the taxable profits, capital allowances can help improve cash flow and increase the amount of funds available for re-investment or other business activities.

  3. Increased Value: Claiming capital allowances can increase the value of the venture by reducing the taxable profits and improving the return on investment.

  4. Support for Business Investment: Capital allowances provide a tax-based incentive for businesses to invest in capital assets, which can help to increase productivity, efficiency, and economic growth.


It is important for commercial property owners to keep detailed records of their expenditure on capital assets and to seek professional advice from a capital allowances specialist to ensure they are claiming the correct amount of capital allowances and in compliance with tax regulations. Capital allowances can provide significant tax savings and help to improve cash flow, so it is worth exploring the possibility of claiming them.


To find out more visit capitalallowances on our website or give us a call on 0843 005 9711.




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