Capital Allowances


Property Embedded Fixtures & Fittings Specialist

A capital allowance is a taxable benefit against expenditure on Plant & Machinery for the purpose of the trade.

As a matter of course, accountants identify movable items which qualify for capital allowances such as desks, chairs, computers, cars etc. However, accountants may be unaware of the qualifying embedded fixtures and fittings within a commercial property that is essential for a business to carry out its trade.

This leaves an enormous wealth of immovable PEFFs on which capital allowances can be claimed, such as heating systems, electrical systems, lifts, security systems, sanitary ware etc. These items are either inherent within the property at the time of acquisition or could have been subsequently installed.

Plant & Machinery is not defined in law. This creates a misunderstanding and confusion in what does and doesn’t qualify.

Functionality and Embedded are key to our approach.

Why, Who, How

WHY are the tax savings from PEFFs missed?

Until an accountant, owner or leaseholder instigates the process of identification e.g., a room-by-room survey with appropriate valuations of the qualifying items, they will remain unclaimed. This means a substantial benefit is missed as items that are fixed and embedded to and within property are taken for granted, unless identified by an experienced tax specialist after carrying out a survey.

Accountants will have an established routine for assessing capital allowances but we look to enhance their routines by introducing additional disciplines that add value to their work.

For example, we complete surveys on properties to identify items that are not visible within paperwork and sat hidden within ‘Land & Buildings’ on the balance sheet, as opposed to ‘Fixtures and Fittings’.

WHO can claim the benefits available?

The tax benefit is available to UK tax payers that incur expenditure, whether they are purchasing a commercial property or funding refurbishment, extension or improvements.

HOW is the benefit claimed?

Qualifying expenditure can be used to recover tax and reduce future tax liabilities. PEFFs are a great way of protecting your profit against tax.

When should you reach out to us for help?

Commercial Property

When you build, extend, buy or refurbish a commercial property.

Being Built or Extended

When a property is being built or extended, PEFFs are often overlooked as there is limited or no detailed paperwork for your accountant to identify these qualifying items.

Buying or Selling

If you are buying or selling a commercial property, it is crucial we review prepared legal documents i.e. Contracts & Sales Agreements to ensure the right provisions are inserted and tax savings are secured. Legislation changes in 2014 which impacted property transactions are dramatically misunderstood resulting in significant tax savings being lost.

Our biggest problem...

everyone thinks they’ve already done it!

My accountant already deals with our capital allowances. Isn’t this something they should have done already?

Most accountants provide some capital allowances advice; however, we have consistently been able to generate significant extra value by identifying opportunities to increase and accelerate tax savings. This is even in situations where our client was initially sceptical that we would be able to add any value beyond their existing adviser.

My accountant assures me they have already claimed everything

There’s no doubt that your accountant will have an established routine for assessing capital allowances and therefore it’s important to stress that we’re not questioning their ability. We look instead to enhance the level of capital allowances claimed by introducing additional disciplines that add value to their work.

Accountants are restricted to the information provided to them and therefore are too often unable to maximise claims, resulting in businesses paying higher taxes. We work alongside accountants to maximise the tax benefits available by claiming the capital allowances on the embedded fixtures and fittings within their client’s commercial properties.

What if this causes problems with HM Revenue & Customs?

Capital allowances are part of standard business routines. The claims ensure you are claiming the right amount. Problems with HMRC would only arise if claims do not qualify or items claimed do not exist. The knowledgeable team, which includes an ex-HMRC inspector who dealt with capital allowances, will, ensure that any claim satisfies HMRC’s requirements.

Can I make a claim without invoices?

Yes. Where invoices are simply not available, our process creates the detail that HMRC require to show proof of expenditure.

Will this affect my capital gains tax or reduce the value of my property?

When you come to sell your property, this will in no way affect your capital gains tax liability nor can you be taxed on a tax repayment. Capital allowances are a right, not a privilege, and are not taken into account when property is valued for commercial or accounting purposes.

I bought my property 10 years ago. Can I still claim?

Yes. It is possible to claim capital allowances in any later years’ tax return, as long as the assets are still owned in that later tax year.

I don’t have sufficient taxable profits to benefit from capital allowances. Should I bother with them?

Yes. In our experience it is always best to identify
capital allowances qualifying expenditure promptly. Firstly, you may have other income or profits elsewhere in a group of companies that the capital allowances can be set against. Secondly, when you become profitable and have used all your carried forward tax
losses, then the capital allowances will be invaluable. Many allowances can also be ‘disclaimed’, which means identifying and agreeing the amount qualifying for tax relief up-front, but choosing to defer claiming the relief until it is actually needed. However, on many occasions we have seen businesses short-sightedly failing to claim capital allowances because they are loss-making, and then not claiming in later profitable years when they need the relief.

It sounds too good to be true. There must be some hidden costs?

There are absolutely no hidden costs, or no catch.
We offer a free initial review to establish whether you are eligible to claim. Costs are purely contingent based on a successful result.

Claim Capital Allowances for Structures & Buildings

Structures and Buildings Allowance is one of the most significant changes in capital allowances in recent years. New construction on non-residential buildings is the primary qualifier for this kind of allowance and is offered over the course of 33 1/3 years at an annual rate of 3%. It’s available for new properties that meet a specific criteria, with the land element being ineligible for this allowance..

If you entered into a building project before October 29, 2018, including any preparatory work, you might be disqualified. The relief becomes available when the building or structure is bought into use. Renovating or converting a structure or building makes things complicated. If you’re doing so to make it a qualifying asset under these terms, you may end up qualifying for a separate relief.


The Process

Stage 1

An initial assessment is undertaken by applying expert knowledge of property law, legislation and qualified accounting and tax skills to determine whether a viable claim is possible, at no cost to you.

Stage 2

Chartered surveyors carry out a physical inspection of the premises compiling an accurate inventory listing the Property Embedded Fixtures & Fittings (PEFF’s) which are subsequently valued.

The specialist capital allowance team processes the survey to calculate the full value of unclaimed capital allowances.

Stage 3

Chartered accounting and tax teams apply claims to the client’s tax position in the most efficient manner before submitting the claim to HMRC on their behalf. We monitor its progress taking full responsibility.

All parties are made aware of the legalities relevant on future property disposals and acquisitions where a claim has been made. Correct advice at the right time is vital.

Working with Acute Business Advisory

Consultative Approach

At Acute Business Advisory, we take a highly consultative approach when working with our clients. We believe that the best outcomes are achieved through a collaborative and tailored approach, which is why we invest the time to understand our clients' unique needs, goals and challenges. Our advisors work closely with clients to gain a deep understanding of their business, and then provide customised, actionable recommendations based on that understanding. Our goal is to not only provide expert advice, but also to empower clients with the knowledge and tools they need to make informed decisions and drive business growth. Our consultative approach is designed to ensure that our clients feel heard, understood, and supported every step of the way. If you're looking for a partner who truly cares about your success, Acute Business Advisory is here to help.

Team of Experts

At Acute Business Advisory, we are proud to have a team of experts with a wealth of experience and knowledge. Our advisors come from diverse backgrounds and bring a wealth of expertise to the table, allowing us to provide tailored, comprehensive advice to our clients. Whether you need support in finance, require advice on your exit options or want to explore tax efficient trusts, we have an expert on our team who can help. Our advisors stay current on the latest industry trends and best practices, ensuring that our clients always receive the most up-to-date, relevant advice. We are committed to providing our clients with the highest level of service, and our team of experts is at the forefront of this effort. With Acute Business Advisory, you can trust that you're working with a team of experts who are dedicated to your success.

Network of Professionals

Acute Business Advisory has a robust network of professionals that we leverage to support our clients in many different ways. Not only do we host networking events to bring our clients and industry leaders together, but we also tap into our network to provide our clients with access to a wide range of specialised services. This enables us to offer a one-stop-shop solution for all of our clients' needs, no matter how complex or niche. Our network is made up of trusted professionals who share our commitment to delivering high-quality, personalised service. By working with our network, we can provide our clients with the support and resources they need to achieve their goals, whether that means connecting them with new partners, finding specialised services, or providing access to capital. With Acute Business Advisory, you can trust that you're part of a wider community of professionals who are dedicated to your success.


Register Your Interest Today

We'll be in touch to explore how we can help you and your business. 

We take a consultative approach and if we can't help you directly we're confident we will know someone that can. 

We look forward to hearing from you.