Firms missing out on millions in capital allowances

The Importance of Capital Allowances

British businesses are missing out on millions of pounds worth of capital allowances, because accountants do not have the necessary support to identify and value all the qualifying expenditure. By working alongside RICS chartered surveyors, they can often find significant additional costs for which a claim can be made.

How Markel Tax unlocks more for clients

Markel Tax offers a surveying service that enables accountants to dig deeper to ensure their clients claim their full entitlement from HMRC to support the growth of their businesses. From care homes to hotels, restaurants, leisure facilities and even holiday lets, we often identify significant additional claims.

In 2021, for example, we identified more than £7.5 million worth of qualifying expenditure so that accountants could provide a greater benefit to their clients. That’s because we worked alongside the accountants to provide experts onsite to support their forensic investigation of the invoices, paperwork and buildings.

The hidden challenges for accountants

The challenge for accountants is that it is relatively easy to identify, for example, the cost of a light fitting from the invoice, and make a claim. However, it is much harder, to understand the cost of holes in walls, the amount of cable needed, the electrician’s time required to install it, and how professional fees should be apportioned to maximise the amount of allowances claimed.

In addition, where mechanical and electrical costs are grouped in one package, it becomes a challenge to separate the main pool items such as sanitaryware from special rate pool expenditures such as a cold-water system.

The role of builders and surveyors

Builders often don’t give a sufficient breakdown in their costs and that can lead to a loss of allowances unless a surveyor and valuer studies the building in more detail. Our surveyors can spot less obvious items such as a “bend,” or wastewater pipe, which qualifies for an 18% tax deduction. They understand that when chrysotile is mentioned it means asbestos, and removing can qualify for a 150% deduction.

Identifying qualifying expenditure

While qualifying expenditure is easy to spot when it comes to moveable fixtures and fittings like chairs and desks, it is much more difficult when it involves anything that is attached to a building. When you install a new lift shaft in an existing building, for example, you can claim for the lift itself but also for the lift shaft, all the cabling, the preliminary investigations and all the professional fees.

Qualifying expenditure in various sectors

The care sector and the others mentioned above frequently spend on qualifying items. Care homes, for example, might invest in everything from reception desks and emergency lighting to nurse call systems, mechanical ventilation systems, access control systems and catering equipment. They might need acoustic partitioning to ensure residents aren’t woken at night and to protect privacy.

Hotels invest in many similar things as care homes and leisure facilities, including standby generators and building management systems. They can even claim for items bought to create an enjoyable atmosphere, such as fountains. A restaurant might install a point-of-sale terminal with cabling that could also be claimed for if it were identified by a surveyor.

Maximise your clients’ claims with Markel Tax

Our surveyors on the ground can help accountants understand not just the cost of these items but all the connected expenditures and costs that HMRC says qualify for capital allowances. We make it easy for you to provide the best possible services for your clients and to claim more money that can help their businesses thrive.

After all, it’s money the government earmarks to help them grow and create wealth and jobs. Claiming more can have benefits for the businesses themselves and for wider society.

Learn more about how we can help you uncover hidden claims and provide greater value to your clients here.