Specialist tax areas are enough to strike fear into anyone. The mysteries of the standard tax system are bad enough, without going into detail.
But what if using such specialist knowledge could earn you an average of £81,000? And that simply finding out if you could benefit wouldn’t cost you a penny?
Well, you’d rightly be interested! And you wouldn’t be alone – you’d be joining one of the 100-plus claimants that Baker Tilly have helped claim off the Inland Revenue.
It’s all down to Capital Allowances, and how they affect property owners. Dealers, notably, are restricted in the claims that they can make on buildings expenditure. In particular, for ‘Industrial Buildings Allowances’ which cannot be claimed for showrooms.
‘But not many know,’ explains Melanie Orriss, ‘that workshops could have qualified for tax relief, subject to a number of conditions being met.’ What’s more, neither do some of these car dealers’ accountants.
Orriss does though. She knows the intricacies of what’s involved. And also knows the IBAs are being phased out. In short, if you want to claim, you need to get on to it – now.
‘Our work involves maximising the claim to capital allowances in respect of property expenditure – thus reducing the tax bills of clients,’ she explained. She does this by researching the tax history not of people, but property. In short: ‘We find any lost allowances for clients’.
As well as the IBA opportunity, motor dealers can also claim capital allowances for some aspects of their other buildings. Maximising these claims is where the real savings are.
‘For construction projects, such as new-builds and refurbishments, claims are generally made for items such as boilers and lifts – their cost is readily identifiable from suppliers’ invoices,’ she added.
The trick to her work is to find the areas that are commonly overlooked. ‘Claims are missed for the full cost of fixtures integral to the building, as these are less apparent. Without specialist assistance, it can be expensive and time consuming to identify these.’
All accountants are pretty good at trawling through a list of invoices to find the cost of an air conditioning unit. But for the best tax relief, you also need the cost of installing that unit – including electrical, ducting and joinery work, and the associated construction work.
‘This is where traditional analysis methods fall down,’ says Orriss. ‘Our approach is so different because we’ve developed our offer in conjunction with a firm of specially trained quantity surveyors.’
You can even claim on property you’ve brought from a previous occupant. ‘If they missed or didn’t maximise claims, you could take advantage,’ she added. Orriss points to a recent case, where Baker Tilly identified an extra £345k in allowances. Potential tax saving? £96k. Not bad…
‘All commercial property owners can benefit – including offices, retail and industrial,’ she explains. ‘It is applicable to any taxpayer, be they corporate, individual, partnership or LLP. The only proviso is the property must be held as a fixed asset. It doesn’t apply to property traders or developers – which shouldn’t be a factor for most car dealers, anyway.
‘Time is no bar,’ affirms Orriss, ‘so it does not just relate to recent spends. Much of our work is looking at situations going back years.’ Got to be worth a call – (01284) 763311.
by RICHARD AUCOCK