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Capital Allowances

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Capital Allowances: Welcome

How does it work?

Fountain Finances works with capital allowance claims specialists who are dedicated to achieving the best possible results for customers who are entitled to claim these commercial property related allowances. The firms we refer cases to have extensive experience of claiming capital allowances on:

  • Pubs, bars, hotels and restaurants

  • Care and Nursing Homes

  • Surgeries for Doctors, Dentists and Vets

  • Industrial Units including Factories, Warehouses and Cold Storage Facilities

  • Student Accommodation

  • Furnished Holiday Lets

  • Retail Units e.g. Large Shopping Centres and Department Stores

  • Specialist Structures such as Piers and Harbours

  • Large Residential Blocks of Flats with claimable common areas especially those containing lifts.

  • Supported Living Accommodation


We work with experienced, fully tax qualified surveyors and accountants to undertake the necessary claims work.  This makes sure that the maximum amount of tax is claimed back from HMRC for clients.  We are based in Manchester and cover the whole of the UK. The service is no win, no fee and rebates are generally paid out in under 12 weeks.


We understand that you already have a firm of accountants, but this type of work is carried out by tax specialist with years of relevant experience in make Capital Allowance claims against HMRC.

What are capital allowances?

Expenses incurred in a business are either capital or revenue expenditure. Revenue expenses are normally expensed for repairs, for example repainting walls. Whereas capital expenditure is usually expenditure on items which provide an enduring benefit for trade. This expenditure is usually not deductible from trading profits, so a measure of tax relief is received in the form of Capital Allowances. According to HMRC a clear definition of capital allowances is, ‘A tax incentive to invest in plant and machinery’. This Government incentive reduces taxable profits by claiming tax relief on certain types of capital expenditure (plant and machinery) to reduce taxable trading profits.


Capital allowances are also available to those who have incurred qualifying capital expenditure on the construction, fit out, refurbishment or acquisition of commercial property within a trade. This can include offices, hotels, restaurants, retail, industrial, mixed use developments and various others.

Does all capital expenditure qualify for capital allowances?

Not all capital expenditure qualifies for capital allowances. The general rule is that the asset must be owned by the company/individual claiming capital allowances. Expenditure on the installation of plant and machinery and demolition costs of a property which is held as a fixed asset (not trading stock) will qualify for capital allowances.


However, please be aware that expenditure on hire purchases, finance leases and cars have a different set of capital allowances rules.

How do I claim capital allowances?

Capital allowances are not given automatically, they must be claimed in a tax return. However, there is no time limit on claiming capital allowances, as long as the asset is still owned and used within the trade.


We suggest that when acquiring a property or completing refurbishment projects, capital allowances are considered at early stages to maximise tax savings potential.  

What are integral features?

Integral features were introduced in Finance Act 2008. Integral features are fixtures and fittings within a building which typically provide a longer lasting use and are harder to remove from the property. Examples of Integral Features include: Lifts, hot and cold water systems, heating and ventilation systems, electrical lighting and power systems and external solar shading. Integral features currently receive the writing down allowance of 6%.


For example if you have a qualifying integral features asset with a value of £100,000 in the first tax year, you will claim 6% (£6,000) of allowances and have a balance of £94,000 in the pool to carry forward. In the second year you will claim 6% of the residual balance and carry forward the remainder. This is repeated until all the allowances are fully utilised or the asset is sold/no longer in use.

What are fixtures?

Fixed are plant and machinery that has been installed/fixed in a property and become part of the building. Ownership of fixtures passes to the new owner of a property once sold.


So even though “plant and machinery” would include tables, chairs etc. they would not be categorised as fixtures. They are known as chattels or movables.

Examples of expenditure in a capital allowances claim

If you have bought or refurbished your premises in the last 4 years or are currently in the process of refurbishing or fitting out your premises here are some of the items we can look at:


  • Costs to re wire your premises

  • Costs for replumbing

  • Costs incurred for your IT network. This does not include the costs of PCs and monitors or devices but does include all cabling costs

  • Air con and ventilation systems

  • Security including CCTV costs

  • Costs incurred to allow disabled access including lifts and ramps

  • Sound and light systems

  • Costs for toilets

  • For hotels, costs of installing en-suite bathrooms are allowable

In essence we will be able to include any capital expenditure that improves the fabric of the building. This could have been undertaken by the previous owner who may not have made the claim for Capital Allowances, so it is always worthwhile talking with us to find out about your own situation.

Capital Allowances: FAQ
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