Is a capital allowances claim legitimate, or is it a scam?

If you own a commercial property and someone has told you there might be thousands of pounds in unclaimed tax sitting inside it, your first reaction was probably suspicion. Good. That instinct is the right one to have. The tax world is full of people promising money for nothing, and a healthy chunk of them are selling something you will regret.

So let us deal with the suspicion head on, because we would rather you trusted us for the right reasons than took our word for it.

Capital allowances are not a loophole

Capital allowances are a statutory tax relief. They were written into law by Parliament, most recently consolidated in the Capital Allowances Act 2001, and the principle behind them goes back to the nineteenth century. The government allows businesses to write off the cost of certain assets against their taxable profits. That includes a lot of what is built into a commercial building: the wiring, the heating, the plumbing, the bathrooms, the kitchens. These are not things you bought separately. They came as part of the property, and the law lets you claim relief on the share of the purchase price they represent.

This is the opposite of tax avoidance. Tax avoidance bends the rules to produce an outcome Parliament never intended. A capital allowances claim does exactly what Parliament did intend: it gives a business relief on capital it has spent. HMRC is not trying to stop you claiming. The relief exists to be used.

So why have you never heard of it?

Because most people, including many accountants, never get into the detail of what is built into a building. A general accountant handles your year-end and your VAT and does it well, but valuing the plant and machinery inside the fabric of a property is a specialist job in its own right. It falls through the gap. That is not a conspiracy. It is just how specialisation works.

Where the scam stories come from

Here is the honest part. There are firms in this market who give it a bad name, and you should know what they look like so you can spot them, whether you are dealing with us or anyone else.

• They build the whole claim from a generic template and will not show you how they reached the figures. A proper report sources every number to HMRC’s own guidance, so you and your accountant can check the working.
• They promise a 100% success rate. Nobody can promise that. What they usually mean is that HMRC processes most claims without checking them up front, which is not the same as the claim being sound.
• They push hard, talk in urgency, and get vague when you ask who actually does the work.
• They will not involve your own accountant, or they discourage you from doing so.

Every one of those is a warning sign, and the accountancy press is full of cautionary tales about firms that tick those boxes. If you ever feel that pressure from anyone, walk away.

What a claim done properly looks like

The work is done properly and shown properly. Every figure is worked out by applying HMRC’s own published guidance to your specific property, and sourced so you can trace it, not lifted from a generic template. Most of that is expert desktop work, and for the big or complicated jobs we visit the building in person. The report is prepared to stand up if HMRC ever looks at it, because a claim that only works as long as nobody checks is not worth having. Then a regulated, insured accountant reviews it, exercises their own judgment and submits it, never a salesperson. And your own accountant is welcome to see everything before a single figure goes anywhere near a tax return.

That is the standard. If a firm meets it, the claim is legitimate. If they do not, no amount of reassurance makes it safe. Ask the questions. The right firm will be glad you did.