Can Embedded Capital Allowances help me get cash from my business premises, without renting any of it out or selling it?
You may be able to take advantage of this special tax relief, but, first of all, you need to answer these questions:
- Do you own a freehold or long leasehold commercial property?
- If so, is that property being used for a qualifying trade?
- Can you prove that you have incurred capital expenditure on that property?
- Are you a UK tax payer?
If your answer to these four questions is yes, then you could be entitled to thousands of pounds of refundable tax.
Embedded Capital Allowances are a tax deductible allowance that can be set against business profits. Every commercial premises has some embedded capital allowances, but according to HMRC, some 90% of these are left unprocessed.
So what kinds of expenditure could be classified as embedded capital allowances? Let me give you some examples:
- Air Conditioning
- Electrical, water, heating and sanitary systems
- Fire Alarms
- Kitchen Equipment
- Moveable partitions
- Mezzanine floors, where they are used as ‘oversized shelving’
- Data and telecommunication infrastructure
- Lifts and escalators
- Furniture that has been fitted, such as kitchen cabinets and vanity units
These are just a few examples – there are many more.
Identification of these items and preparing reports on embedded capital allowances is skilled work. I would recommend you carefully choose professional specialists who have had a high success rate with their submissions to HMRC.
They can review your premises and assess the potential for embedded capital allowances in a brief initial meeting that should cost you nothing and commit you to nothing.