Maximising capital allowances reduces taxable profit, resulting in reduced tax liability which brings significant cash savings for, UK corporate and income taxpayers. Although a legislative allowance (Capital Allowances 2001 (CAA2001), eligible claimants miss out on considerable cash savings, due to poor advice or lack of understanding.
At Wandsworth Consulting, we have found that there are many common myths surrounding capital allowances UK, and we explore some of those key myths below.
Can you run out of time to claim allowances?
The answer to this is yes and no. Depending on how and when you acquired the qualifying assets.
For example, if a UK taxpayer incurred the cost of an office refurbishment in 2019 and the assets are still in use, then the claimant can still claim allowances and benefit from the cash savings.
If a claimant purchased an office in 2019 and didn’t address capital allowances during the negotiation stage, then all allowances have been lost and no saving can be realised.
Each case is different, but by using a specialist you have the peace of mind that all compliance requirements are being met.
Claiming Capital Allowances is a Complicated Process?
Capital Allowances is legislated by act of parliament and the rules are constantly changing.
A specialist will have knowledge of property law, surveying and valuation skills as well as a knowledge of the UK tax laws.
Areas such as current super-deduction and annual investment allowance rates, BWIC costs, and, preliminaries, professional fees and OH&P also need to be considered.
Using a reputable specialist takes the laborious task away from the tax payer, allowing them to concentrate on their business knowing the issue of Capital Allowances are being dealt with.
You have to claim capital allowances?
Under current REITs rules all allowances must be claimed. All other allowances are claimed through the UK self-assessment scheme.
The onus is on the taxpayer to claim the allowances. Allowances are included within a CT600 for corporate taxpayers or, SA100/SA800 for individuals resulting in higher tax liabilities.
Summary
With Capital Allowances becoming more and more complex and compliant, the need for a specialist is more prominent than ever. The experienced team at Wandsworth will work with your finance and project teams, and through correct tax planning, due diligence, collation, and reporting; we will ensure that all allowances and savings are maximised..
