Tax Planning - A taxing matter: don’t miss out on tax advantages.

Plant and Machinery Allowances - What are they?

Plant and machinery capital allowances are a form of tax relief that allow a significant proportion of office fit-out and refurbishment expenditure to be treated as a valuable tax deduction.  They are best thought of as a reduction in the cost of the assets and they also provide a cash flow benefit.

However, capital allowances are only available for money spent on some assets installed (called ‘plant and machinery’) and the remainder of the expenditure will attract no tax relief at all.  And, to obtain the tax relief it is necessary to proactively identify the money spent on those qualifying assets and claim the amount in a tax return, which under self-assessment must be accurate and properly supported. 

How are capital allowances valuable?

Depending on its precise design and specification, typically, 55% - 65% of the money spent fitting-out or refurbishing a Genus designed office will qualify for plant and machinery allowances.  For every £0.5 million of expenditure, this will save tax of approximately £85,000 to £100,000 at the standard corporation tax rate.

To obtain the full value of capital allowances it is therefore important to ensure that capital allowances claims are expertly prepared.  This maximises the tax relief available and minimises the risk of unnecessary Inland Revenue self-assessment enquiries, interest charges or penalties (capital allowances are an increasingly popular enquiry area, as capital allowances are not generally well understood and claims are often poorly prepared).

How Genus can help?

Genus can help as we have a relationship with a firm of leading specialist capital allowances advisers, with tax, surveying and accountancy expertise.  They are able to work with us and our customers to ensure that the tax efficiency of our design proposals are considered up-front, evidence is produced to prepare and support a capital allowances claim, and the claim is prepared on a maximised basis and robustly defended if enquired into. 

Specialist advice of this nature can be invaluable by significantly speeding up the claim process and increasing the qualifying expenditure identified by as much as 25% of the fit-out money spent.

So if you want to know more, or get advice on your fit-out for capital allowances please use the email link:  steve.perry@cap-allow.com

Genus Interiors: the future of tax efficient working environments.