Capital allowances are a tax relief available to businesses. These will let you deduct part or all of the value of an item from your profits before you pay tax.
Eligible items include:
These include heating, lighting, security systems, or anything that is a fixed part of your office building.
Many businesses will claim the standard Capital Allowances tax relief on their plant and machinery but may be missing out on less well-known Capital Allowances reliefs.
Anyone considering buying, building or extending commercial property should take advice before the transaction, as valuable capital allowances will likely be available.
With the end of the popular Super Deduction initiative, we saw the announcement of Full Expensing, which is due to run for the next three years. This initiative will allow capital expenditure to be written off in full, with no limit to the available relief.
Full expensing is only available to those entities subject to Corporation Tax on Main Pool assets (not cars) which are acquired brand new and not to be leased. For any unincorporated businesses that do not qualify for the Full Expensing initiative, they will be able to claim via the Annual Investment Allowance. Learn more about the Annual Investment Allowance (AIA) in our blog.
Do you need support with your taxes? Speak to a team member today.
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The registered office of BHP LLP (registered under number OC416373 in England and Wales) is Albert Works, Sidney Street, Sheffield, S1 4RG
