What counts as a capital allowance inside your building?
The fixtures hidden in a commercial property that qualify for capital allowances, from heating and wiring to sanitaryware, and why they are so often missed.
- Heating, wiring, lighting, sanitaryware and more all qualify.
- They are missed because they were never itemised at purchase.
- Heavily serviced buildings hold the most relief.
When you buy a commercial property, the price is one number. But that number is paying for a lot more than bricks and land. It is paying for everything built into the building to make it work, and a good share of that qualifies for tax relief most owners never claim.
What is in there
The list is longer than people expect. In a typical commercial building it includes the heating and hot water systems, the electrical installation and distribution, the lighting, the air conditioning and ventilation, the water and sanitary systems, the fitted kitchens and bathrooms, the fire alarms and security systems, the lifts, and a good deal more depending on the trade. These are plant and machinery in the eyes of the law, even though they are bolted into the fabric of the building.
Why it is missed
Because none of it was itemised when you bought the place. The purchase was one price for the whole property, and unless someone goes back and works out what share of that price belongs to the qualifying fixtures, the relief just sits there. Your accountant cannot see it in your books because it was never broken out. It takes specialist work to go through the building and apportion the cost properly.
How much it can be worth
It varies a great deal by property type. A heavily serviced building like a care home or a hotel can hold a far higher share of qualifying expenditure than a plain warehouse. The only way to know what is in yours is to have it looked at properly. We will give you a realistic figure once we have looked, and we only charge if there is a claim to make.
One note on the jargon. You will see this called embedded capital allowances all over the internet. It is just capital allowances on the fixtures within a property. The plainer name is the better one, and the specialists who judge these claims tend to prefer it.