Capital AllowancesFor Integral Features
Capital Allowances for Integral Features
This relief is available to UK tax payers who own or are purchasing / selling commercial properties. As a result of claiming, you can receive a reduction in current and future tax liabilities. The relief is highly underutilised, with it being estimated that less than 20% of people who could claim actually do so.
Capital Allowances for Integral Features are Capital Allowances in respect of ‘fixtures’ i.e. plant and machinery that are fixed or integral to a building and can be claimed in accordance with Section 11 of the Capital Allowances Act 2001, by individuals, partnerships and companies.
With regard to what you can claim for, whilst you cannot claim for the property itself (i.e. walls, building structures), you can claim for building adaptations and embedded features including, electrical / lighting systems, cold water systems, water and space heating systems, thermal insulation, fire safety equipment, lifts and escalators and external solar shading.
Claiming CA’s for Integral Features
There are different rates for different types of capital expenditure, which allows flexibility within the relief. For CA’s for Integral features, if you use up your £200K limit for AIA, you then claim for remaining expenditure through your Writing Down Allowance (8/18%)…
Both the Annual Investment Allowance (AIA) and the Writing Down Allowance (WDA) can be used when claiming Capital Allowances for Integral features. HMRC guidelines (CA22360 and CA23084) confirm that claimants are free to allocate their (current cap) £200K per annum AIA – given at 100% – to qualifying integral features and fixed asset costs in any way they think fit.
However, the AIA is only available when the qualifying expenditure is incurred during the current financial period that is still open for amendment under self-assessment rules. Individuals / partnerships have 9 months following the end of a tax year and companies have 12 months following the end of an accounting period to submit a tax return, both then have a further 12 months to amend it.
Why are so few claims made and how should I go about claiming?
Whilst items like computers, cars, furniture etc. are typically widely claimed for, embedded features of a property often aren’t because the correct information to support the claim is not usually readily to hand to deal with them. Using an independent specialist firm that employs and uses an experienced, professional, chartered surveyor, and provides up-to-date tax knowledge is often the safest and most sensible way to go about claiming.
We use a highly professional and qualified, chartered surveyor to carry out the necessary surveys.
How long does it take to make a claim?
If we are provided with prompt access to both the necessary information for our surveyor to visit your premises, we typically expect that you will have received a tax refund or have a confirmed reduction in future tax liabilities within 8 to 12 weeks of engagement.
How long do I have to claim?
Taxpayers now have 2 years from the date of transaction to submit an election to HMRC – if an election isn’t made within 2 years then the allowances will be lost in perpetuity on that property.