If you run a business and are paying tax in the UK, you may be eligible for capital allowances. These allowances allow you to claim tax relief on certain costs of buying or improving property and equipment. If you own a commercial property, residential rental properties, or any qualifying assets, we can help you understand what qualifies for allowances and maximise the tax benefits available to you.
Our specialist consultants provide clear, customised advice to ensure you're making the most of the allowances available while navigating complex rules.
Capital allowances are available to those operating a business as an individual, partnership, company, trustee or overseas investor registered under the non-resident landlord scheme.
Capital allowances compensate for depreciation not normally being deductible for tax purposes. Qualifying activities for capital allowances are:
The scope of where capital allowances may apply is extremely broad, which makes it easy for businesses to overlook certain types of expenditure that are in fact eligible. It is therefore common however for businesses to underestimate the proportion of their capital expenditure that qualifies for capital allowances, meaning you may be paying too much tax.
It is also important to review the capital allowances position when purchasing a commercial property, as there are a specific set of rules which apply that may restrict your ability to claim for capital allowances on any existing plant and machinery within the building. This may come as a shock after the event, but if you know about this in advance of any purchase you can agree appropriate commercial terms; and we can assist with this.
Note: although capital allowances have a wide application and all business owners can benefit from them (even those who don’t own property), at ETC Tax we most often see them discussed in the context of property transactions, hence including them here.
