According to research by the Law Society, there is a worrying level of confusion among solicitors in their approach towards capital allowances, which could leave them open to risks ranging from loss of income, to client complaints and litigation.
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The data reveals that almost three in four are unlikely to draw their client’s attention to the importance of the capital allowances, while almost four in 10 solicitors believe it isn’t their responsibility to ensure that capital allowances are assessed. And of those that are willing to explore the tax relief, only 2% admit to taking the initiative to instructing a capital allowances specialist.
"The average capital allowances claim is worth £160,000 and in most cases a HMRC tax refund is due"
Ian White on Capital Allowances
Ian White, Chair of the Law Society's property section committee, said: "attitudes towards capital allowances differ significantly between solicitors who take action only to avoid risks such as litigation, and those who are embracing the changes and seeing the commercial benefits."
"Capital allowances work is beneficial to both solicitors and their clients. It need not delay property transactions, so I would urge all solicitors involved in commercial property transactions to make the most of capital allowance relief."
"Capital allowances are available to any business incurring capital expenditure from buying commercial property. Commercial property owners are entitled to a tax relief in the form of capital allowances on qualifying items. Solicitors have been obliged to raise the issue of capital allowances relief since April 2014."
"Solicitors have a duty to provide advice to clients on capital allowances."
"Solicitors who embrace capital allowances relief can expect it to position them as trusted advisors, drive increased customer satisfaction and be lucrative for both themselves and their clients"