New Research by Deloitte Claims Business Landlords and Property Owners Could Claim Back £1bn in Tax Allowances

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Individuals or companies in the UK that own commercial property could save billions of pounds if they claimed full tax relief on their properties.

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The easy rule of thumb is, if you have not had a surveyor crawl all over your building to assess the items you can claim for, you are very likely to be missing out.

Individuals or companies in the UK that own commercial property could save billions of pounds if they claimed full tax relief on their properties.

According to Deloitte there are around 90% of commercial properties owed a tax rebate using 'capital allowances' legislation. Using this figure as a baseline, some experts say UK businesses could be owed as much as £70bn in unclaimed tax allowances.

But why aren't the accountants who represent these landlords, applying for tax refunds? "They routinely claim on everyday purchases which would be seen as a normal business expense, but they often fail to claim other, less obvious, fittings" says Jan Post of RIFT Capital Allowances. She continues: "Many are hard to spot and if they have been in the building for a number of years there won't be a receipt and so an accountant is unlikely to know the correct value of them. The other reason why they are missed is that they can only be claimed once, and so a check needs to be carried out to make sure a claim has not been made before by a previous landlord."

Specialist companies send forensic surveyors to draw up a list of all the fittings in every room, including hidden items such as cabling. They then feed it into a database with thousands of different items which come up with, for example, a price for a door handle put into the building in the 1990s.

Taking advantage of capital allowances tax legislation means businesses can claim tax relief on fittings such as air conditioning, pipework or cabling, lighting and even pictures on an office wall. It doesn't matter if the property was bought ten years ago, however the landlord will need to be a UK taxpayer.

RIFT research shows that the lowest level for a successful claim is a 10% tax refund (as a percentage of the property price) for warehouse owners, and up to as much as 45% of the purchase price for restaurant, pub or nursing home property owners.

Two recent examples include: A pub was bought for £975,000 and just under £292,500 worth of capital allowances were identified. The owner was a 40% income tax payer, and an income tax saving over time of £117,000 was achieved. There was an almost immediate income tax saving for the first year of £21,060 to the owner. A nursing home was purchased at a cost of £2.95 million. When the work was completed £885,000 worth of capital allowances had been identified and as the owner was a 50% income tax payer, this meant an income tax saving over time of £442,500. There was an almost immediate income tax saving for the first year of £79,650.

According to Jan Post: "The easy rule of thumb is, if you have not had a surveyor crawl all over your building to assess the items you can claim for, you are very likely to be missing out. "

Rift Capital Allowances is a new website specifically for those in need of help with their capital allowances claims. It has been set up by RIFT UK, the tax refund specialists based in Kent. Visit the new website to get the lowdown on capital allowances claims and use the free tax calculator tool.

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