What Are Capital Allowances?

Capital allowances are often missed because they cannot be identified from accounts alone. We uncover the embedded value within your property and turn it into substantial, fully compliant tax savings.

Types of capital allowances?

In the UK, capital allowances are a type of tax relief that business owners can claim on certain types of qualifying capital expenditure. These qualifying assets include possessions that they acquire for use in their businesses, but also, unbeknown to most owners, embedded fixtures that were already in the building when it was purchased!

Annual Investment Allowance (AIA)

Offers immediate tax relief for up to a certain limit of qualifying purchases, such as plant and machinery or integral features, in a single year.

Writing Down Allowance (WDA)

Provides relief over time for assets that don’t qualify for AIA, such as cars and assets owned by a business that leases equipment or properties.

First-Year Allowances (FYA)

Allows businesses to claim 100% of the cost for certain energy-efficient and environmentally beneficial assets, such as solar panels and wind turbines.

Structures & Buildings Allowance (SBA)

Provides tax relief at 3% per year for the construction or renovation of non-residential buildings and structures, spread over 33⅓ years.

Property Purchase Claims

A Capital Allowances Purchase Claim allows buyers of commercial properties to claim tax relief on qualifying embedded items included in the purchase price. Up to 40% of the purchase cost may qualify, reducing taxable profits and potentially generating cash rebates.

Cost Claims

A Capital Allowances Cost Claim provides tax relief on money spent by a business to build, refurbish, extend, or improve a commercial property. Unlike a purchase claim, it covers direct expenditure by the owner.

Full Expensing

Full expensing is a tax relief that allows businesses to deduct 100% of the cost of qualifying plant and machinery from their taxable profits in the year the expenditure is incurred, rather than spreading the relief over several years.

By claiming capital allowances, businesses can reduce their overall tax liability, making it a valuable tool for managing cash flow and investments.

Up to 70% of expenditure can qualify.

Have the best capital allowances professionals on your side.

At Eureka Capital allowances, we have decades of experience in capital allowances, and help our clients to unlock thousands of pounds of hidden tax relief in their properties.

Whether you’re investing in new property or managing a complex portfolio of assets, we provide the insights and guidance needed to manage your tax liability more effectively.

Types of qualifying expenditure?

Capital allowances are an essential way of reducing your business tax liabilities through investment in various assets.
They can be claimed on various types of qualifying expenditure.

Plant and machinery

One of the most common types of qualifying expenditure, plant and machinery assets refer to any physical items that are essential in the operation of a business. Types of plant and machinery include heating systems, electrics systems, ventilation systems, and so on.

Integral Features

Integral features refer to any essential components of a building’s infrastructure that support its operation, including: Electrical systems, Heating and cooling systems, Water systems, Lifts and escalators. These integral features are considered to be qualifying expenditure for capital allowances due to their role in maintaining the building’s operational efficiency.

Questions.

Have any questions that we haven’t answered here? Get in touch with us and we will do our best to answer them for you!

Why Accountants Can’t Claim These Allowances.

Capital allowances on property cannot be identified from accounts alone and usually require a specialist review of the building itself. As accountants are not trained or insured to carry out building surveys, significant capital allowances are routinely missed without this process.