Low-capacity commercial property owners could take the majority share of capital allowance tax rebates totalling £70bn, according to taxation specialists CA Tax Solutions.
Research from industry leading accountancy firm Deloitte suggests that capital allowances reports will yield tax rebates for nine out of 10 applicants, with CA Tax Solutions indicating that the average rebate to date totals £25,000 net, while the largest has been for £10m net. Claims of this nature can also be made retrospectively, indicating that the total amount to be claimed in future could reach £60bn-£70bn.
Figures suggest that it is the smaller business centres that are likely to benefit most from the rebates, as independent accountants seek to maintain their reputations while a non-specific approach has led to oversights in the intricacies of commercial tax law.
Mark Tighe, managing director, CA Tax Solutions claims, “Capital allowances on commercial premises are one of the more obscure areas of tax and often pass under the radar. A big problem is that many accountants are embarrassed to approach their clients about the issue, as really this is something they should have alerted them to years back.”
“The bottom line is that it’s a very tough climate for the majority of UK firms right now and a cheque from the Inland Revenue would be a real fillip.”
Although capital allowances are available on all capital expenditure purchases, focus has remained on the initial investment rather than maintenance and utility costs. Facilities such as air conditioning and lighting are often given allowances when installed, however the majority of the cost is likely to occur as a result of usage, which has so far been largely overlooked.
With markets still failing to recover as speculated, this news will come as a welcome relief to many small business owners who have struggled to garner investment from the banks. It also highlights the value of leasing office capacity through an organisation such as Search Office Space, keeping tenants shielded from such bureaucratic confusion and ensuring experienced professionals are on hand to offer advice.