Are you maximising your Capital Allowances claims?

Are you maximising your Capital Allowances claims?

Capital Allowances – tax relief on depreciation of assets and equipment

Capital Allowances are the mechanism by which tax relief is obtained on the depreciation of assets and equipment. These should be maximised as far as possible, and the timing of future expenditure should be considered carefully to maximise tax savings. Companies should optimise use of the Annual Investment Allowance, which currently gives full tax relief in the year of acquisition of up to £1m spent on assets and equipment. This allowance is expected to reduce to £200k from January 2021.

Expenditure on acquiring, upgrading or fitting out property is a more complex area, and should be carefully reviewed to maximise potential claims. Claims are often done at a high level by less specialist accountants, with insufficient attention being paid to fully identifying and properly allocating qualifying costs. A forensic review by a capital allowances specialist can result in significant additional tax savings.

As always, the key to successful tax planning is to seek advice as early as possible.

If you would like more information or would like to discuss your tax affairs in more detail please contact our tax partners, Steve Crompton or Lucy Williams on the details below:

Steve Crompton
Partner – Head of Tax
direct dial: 01942 292541
mobile: 07790 840394

Lucy Williams
Tax Partner
direct dial: 01942 292543
mobile: 07807 053494