Capital allowances consultation on fixtures in commercial buildings is ending soon
The Inland Revenue consultation on claiming allowances on fixtures in buildings will come to and end on the 31st August 2011. All owners of commercial buildings, including landowners with rural commercial buildings, need to review their allowances now and take appropriate action, say leading accountants Saffery Champness.
Mike Harrison, a partner of Saffery Champness Landed Estates and Rural Business Group, explains the position: Currently, capital allowances on fixtures in a building either when it is first purchased or brought into use can effectively be claimed some years down the line. This is because there is no requirement to claim all allowances every year. The current position has been particularly helpful to those who have purchased commercial buildings but have not fully assessed the extent of the fixtures in the building that would qualify for annual capital allowances until sometime after the purchase.
The Revenues consultation is on whether owners should be required to pool (claim) their expenditure on fixtures within a short space of time after the purchase or lose the capital allowances altogether. Saffery Champness is advising those who have either purchased commercial buildings or brought them into use – without getting a detailed report on the fixtures within the building that could qualify for capital allowances – that they will need to decide whether such a report is worthwhile, sooner rather than later.
If changes are made as a result of the consultation, they are most likely to be implemented in the Finance Act 2012, and thereafter, any allowances not yet claimed could be lost. At present, a large amount of allowances in buildings are likely to be under-claimed, purely because identifying them is a specialist business, which requires professional input, says Mike Harrison.
There is an urgent need for owners of commercial buildings to review whether or not accurate allowances have been claimed and, if not, to consider if a claim is appropriate, Mike Harrison concludes.
Saffery Champness was founded in 1855 by Joseph John Saffery and today has 55 UK partners and more than 400 staff, with nine offices on the UK mainland and offices in Guernsey and Geneva. For further information about the Company, please visit www.saffery.com
Saffery Champness has worldwide associations in over 100 countries through its membership of the global association Nexia international.
Saffery Champness’ Landed Estates Group is headed by a team of 15 partners who advise landowners, agricultural and rural businesses on financial and tax matters, particularly capital taxes and VAT.