Services We Provide

We offer a variety of different services in all areas of capital allowances.

Services

Excellent knowledge of all areas of capital allowances, R&D and property tax relief.

We have a comprehensive knowledge base for all areas of capital allowances, R&D and other areas of property tax relief.

We offer fully tailored services for a range of projects for all clients whether they are property owners, investors, or occupiers. We can assist with the tax planning stages right through to agreement and negotiations with HMRC, providing full support and back up documentation for the submission of our reports for all of our work.

Fit out, refurbishment or construction project claims

Property purchase and disposal claims

Commercial property enquiries advice and S198 election services

Research and Development tax credits

Land Remediation Relief

Furnished Holiday Lettings

The basics

Capital allowances

What are Capital Allowances?

Capital allowances save money – they are the only means of providing tax relief on capital expenditure incurred by tax payers on commercial property projects.

Any expenditure on property, be it a refurbishment, fit out, a purchase or a new build, can give rise to an opportunity to claim allowances. When constructing, altering or refurbishing a commercial building, a substantial amount of the expenditure incurred will be eligible for capital allowances relief.  As the name suggests, the expenditure must be ‘capital’ in nature to qualify for the tax relief.

Our approach

We believe that all projects benefit from having senior personnel working on them from start to finish. We have an impeccable track record of maximising Capital Allowances for clients on all capex projects, be it, construction, fit-out or refurbishment works and are best placed to help raise the Capital Allowances opportunities available.

We thrive from having a specialist and dedicated team who, as a result can adapt quickly to changing project timelines and specifications. We will aim to work closely with our clients to act as an extension of their team to ensure continuity between us and the project and finance teams. As a result of this approach we regularly build strong long-term relationships with our clients.

We are committed to employing all the information and expertise at our disposal to maximise the Capital Allowances relief for our clients.

Hotels

Furnished Holiday Let

Offices

4

Industrial units

Mixed use developments

Restaurants

Checking that you have a valid
claim and collecting all the data required to make the claim.

Property surveys; taking notes and photos for claim support, including measurements and floor plans.

Preparing a detailed analysis of all costs showing the tax treatment of them and the allowances being claimed.

Negotiating a
settlement with HMRC.

Wandsworth are standout advisors in this specialist area. Their advice greatly benefits our clients and further enhances our comprehensive range of services for building owners redeveloping their properties.

Sean Cleaver(Corep)

Capital allowances FAQs

Please get in contact with us if you would like some more information on any of the following:

  • Property purchases & disposals
  • CPSE and Section 198 drafting services
  • Property construction & development
  • Property fit out or refurbishment projects
  • Furnished Holiday Lettings

What are capital allowances?

Most UK businesses pay tax on trading profits and have significant interests in commercial property. Capital allowances are the only means of providing tax relief for capital expenditure incurred by both UK and overseas taxpayers on commercial property.

They act as an incentive to invest and save money for these businesses by offsetting tax on profits that would otherwise be due. Capital allowances, therefore, reduce taxable profits for companies, businesses and individuals.

Fitting out project

Project cost*

£2.75m

Total allowances range (plus £400k SBA)

£2m to £2.35m

Cash benefit to client

£425,000

First year cash benefit

£125,000

New build project

Project cost*

£20m

Total allowances range (plus £7.20m SBA)

£11.50m to £12.80m

Cash benefit to client

£2.7m

First year cash benefit

£650,000

Property acquistion

Project cost*

£50m

Total allowances range (plus £8.75m SBA)

£27 to £29m

Cash benefit to client

£3.6m

First year cash benefit

£475,000

Property acquistion

Project cost*

£5m

Total allowances range (plus £750k SBA)

£3.75m to £4.25m

Cash benefit to client

£773,000

First year cash benefit

£226,000

Furnished Holiday Lettings FAQs

Capital allowances on furnished holiday lettings

Some UK property owners have second homes, either in the UK, or within other European Economic Area countries. What many don’t know is that if these are let out furnished for at least part of the year they may well qualify for significant tax advantages. The most important tax advantage during the period of ownership is capital allowances, this can reduce part if not all the tax payable on rental income received from UK income tax or corporation tax.

What is a furnished holiday let?

For a property to qualify as a Furnished Holiday Let (FHL) for tax purposes it has to pass a number of criteria and tests.  In addition, the properties need to be located in the UK or the European Economic Area (EEA).

Capital allowances for FHLs; can I claim?

Often capital allowances are not claimed on qualifying FHL properties because the owner is not aware that they can or, due to the complexity of the legislation. If a FHL is let with a view to making a profit then it qualifies for capital allowances purposes as it is seen to be let on a commercial basis. It is worth noting lettings at undervalue rates to friends or family do not qualify as commercial lettings.

Capital allowances can be claimed in accordance with the Capital Allowances Act 2001 on what your business spends on certain assets that it owns and uses within the business providing certain conditions are met. They are available to sole traders, self-employed persons or partnerships, as well as companies and organisations liable for Corporation Tax. They aim to provide tax relief for the reduction in value of qualifying assets that you buy and own for business use by letting you write off their cost against the taxable income of your business.

Capital allowances are not the same as depreciation within the accounts as depreciation gets added back when calculating taxable profits. Capital allowances reduce taxable profits. Even if the property owner is aware that a property should qualify as a FHL, there is often confusion over what can be claimed and the value of the claim.

Capital allowances relief is available on expenditure incurred on plant and machinery (P&M), which includes P&M fixtures already installed in buildings when a property is acquired. Below are some examples of qualifying P&M:

  • All loose furniture and equipment;
  • Heating and air-conditioning installations;
  • Electrical systems (dependant on when the expenditure was incurred);
  • Fitted kitchens and bathrooms;
  • Swimming pools.

Where the P&M was acquired as part of the overall property purchase price, the claim is based upon an apportionment of the purchase price. Apportionment claims require specialist valuations of what it would cost to buy the land and reconstruct the building at the date of purchase. On subsequent expenditure, details of the cost information will be required to be able to analyse the costs. Integral features attract capital allowances at the rate of 6% per annum, whilst all general pool P&M will be allowable at the higher rate of 18% per annum.  These writing-down allowances are given on a reducing balance basis.

Land Remediation Relief FAQs

What is Land Remediation Relief?

Land Remediation Relief (LRR) was introduced in 2001 to encourage the bringing back into use of land that had been blighted by previous use for industrial purposes. In 2009, the relief was extended to include bringing long term derelict land back into productive use.

LRR is a corporation tax relief that is available to investors and developers where companies acquire land in a contaminated or derelict condition.  With land increasingly at a premium, it is more and more likely that brownfield regeneration will be a common option for re-development. It provides a deduction of 100%, plus an additional deduction of 50%, for qualifying expenditure incurred by companies in cleaning up land acquired from a third party in a contaminated state.

Qualifying costs include the remediation of contaminated land, removal of asbestos from buildings, breaking-out buried structures and the treatment of harmful organisms and naturally occurring contaminants, for example, Japanese Knotweed, radon and arsenic.

Qualifying expenditure includes the cost of establishing the level of contamination, removing the contamination or containing it so that the possibility of relevant harm is removed. The relief must be claimed.  If the remediation work is not carried out no relief is available.

LRR is often not maximised as it must be actively claimed.  For companies in competitive tender situations, these savings can be factored in to quotes to enhance their chances with the bids.

Retrospective claims

You can make a retrospective claim for LRR if you claim within two years from the year end in which the expenditure on remediation was incurred.

Examples of LRR claimable items

Below are a few examples of the types of works where LRR can be successfully claimed against:

  • Remediation of contaminated sites
  • Asbestos management; whether it be extraction or containment works qualify for land remediation relief, including all associated works (e.g. prelims, professional fees, prolongation etc.).
  • Gassing measures; membranes, suspended slabs
  • Concrete; sulphate resistant
  • Japanese Knotweed
  • Fees; direct remediation and various design team fees
  • Prolongation; unforeseen remediation works

Land Remediation Relief is available on both capital and revenue expenditure. However, the company must elect, within two years of the end of the accounting period in which the expenditure is incurred, to treat qualifying capital expenditure as a deduction in computing their taxable profits.

If you need assistance or would like to discuss anything please email info@wandsworthconsulting.com

The basics

Research and Development

R&D Relief is a Corporation Tax relief that may reduce your company or organisation’s tax bill if it’s liable for Corporation Tax.

If your company and the project you are working on meeting the relevant criteria, it is possible for you to claim tax relief on the revenue expenditure (the running costs of your business) and some capitalised revenue expenditure you have incurred in each accounting period.

Alternatively, if your company or organisation is small or medium-sized, you may be able to choose to receive a tax credit instead, by way of a cash sum paid by HM Revenue and Customs (HMRC) if you surrender the relief.

Research and Development FAQs

Please get in contact with us if you would like some more information on any of the following:

  • How to make a successful R&D claim
  • Simplifying R&D

What is R&D?

R&D Relief is a Corporation Tax relief that may reduce your company or organisation’s tax bill if it’s liable for Corporation Tax.

If your company and the project you are working on meet the relevant criteria, it is possible for you to claim tax relief on the revenue expenditure (the running costs of your business) and some capitalised revenue expenditure you have incurred in each accounting period.

Alternatively, if your company or organisation is small or medium-sized, you may be able to choose to receive a tax credit instead, by way of a cash sum paid by HM Revenue and Customs (HMRC) if you surrender the relief.

R&D relief schemes

There are two main schemes for claiming relief.  The one that you use will depend on the size of the company or organisation.  They are:

  • the Small or Medium-sized Enterprise (SME) Scheme
  • Research and Development Expenditure Credit (RDEC) Scheme (known as the ‘Above the Line R&D tax relief scheme)

There are also another aspect of R&D to consider.  This is:

  • R&D Capital allowances

Research and Development Expenditure Credit (RDEC) Scheme

The RDEC scheme was introduced for Large Company expenditure incurred on or after 1 April 2013.

What changed with this new regime is the method by which relief is given, so this becomes a direct cash incentive, rather than an incentive delivered as a tax relief. It is given as a taxable credit on the amount of qualifying R&D expenditure.

For this scheme the rate of relief is 12% of qualifying R&D expenditure.

The Small and Medium-sized Enterprise Scheme

This scheme is for companies meeting the SME definition (see below).  It has higher rates of relief to reflect the fact that smaller companies need more of an incentive to help them develop and grow.

The tax relief on allowable R&D costs has been set at 230% of the qualifying R&D expenditure.  That means, for each £100 of qualifying costs, the company or organisation could have the income on which Corporation Tax is paid reduced by an extra £130 in addition to the initial £100 already spent. In addition, there is a facility to surrender the tax relief for a payable credit where there is no taxable profit made in an accounting period.

You can only claim under this scheme if your company or organisation meets the definition of an SME for R&D Relief purposes.  The definition is set out below.

To claim R&D relief your company must be a going concern when it makes the claim and not in administration or liquidation. If your company or organisation ceases to be a going concern after making a claim but before any credit is paid, HMRC treats the claim as if it has not been made and you don’t get tax credit.

What is a SME for R&D?

An SME is a company or organisation with fewer than 500 employees and either of the following:

  • an annual turnover not exceeding €100 million
  • a balance sheet not exceeding €86 million

This definition has applied to spending on R&D from 1st August 2008.

For expenditure incurred before 1st August 2008 the definition of an SME was a company with fewer than 250 employees, and either of:

  • an annual turnover not exceeding €50 million
  • a balance sheet not exceeding €43 million

If your company is part of a larger enterprise that, if taken as a whole, would fail these tests, then you may not be considered to be an SME.

When you’re considering the limits above, you may need to include any company that has a shareholding of 25% in your company and/or any company your company holds a 25% share in.

If your company or organisation is claiming relief under the SME Scheme, for accounting periods ending before 9th December 2009, then it must own any intellectual property that might arise from the project up to that date.

Get in touch

Whether you are property owners, investors or occupiers, let us know how we can help.