Thursday 29 August 2013

From Portal Tax to Portaloo? Relief may be in the offing ...

"Solicitors could claim back tens of thousands of pounds in tax using capital allowances, but must do it by April 2014" is the exciting title of a circular which this blogger has recently received from Portal Tax. From this release, it appears that
If your practice isn't
flush for cash, why
let the taxman get it?
" ... The [UK] 2012 Finance Bill [which appears to have been an Act since June 2012] introduced a transitional period which runs until April 2014. If a commercial property is sold within this period then it can be treated in the same way it would have been previously. Before April 2012 you could choose when, and whether, you made a capital allowances claim on your business. The owner does not have to make a claim for capital allowances before he/she concludes the transaction, but they will have to agree to the fixed value requirement within 2 years. The next time the property is sold, even if it is the very next day, then the new rules apply and capital allowances must be considered as if it were post April 2014.

If the current owner acts now they can claim the full capital allowances back for themselves. If they do nothing, a future owner of the property may benefit instead. Portal Tax has helped businesses to maximise any capital allowance claims on their commercial property - on average, £105,000 for each business in outstanding capital allowance for items ranging from fire alarm systems, to heating, to air conditioning.

Data compiled by Portal Tax has revealed the top ten items by volume on which tax has been claimed back.
1 Ironmongery (including closers, latches, locks, etc)

2 Sanitary ware (including WCs [no doubt providing relief in more than one sense of the word ...], basins, second fix pipework etc.)

3 Power, Data and Lighting Fittings (including sockets, switches etc.)

4 Floor Finishes (including carpet, vinyl sheet etc.)

5 Hot and Cold Water Equipment (including pipework, tanks etc.)

6 Signage

7 Wall Finishes (such as ceramic tile splashbacks)

8 Fire, Communication and Security Systems (such as alarms, cameras, other equipment)

9 Heating, Cooling and Ventilation systems (including air conditioning, radiators, boilers etc.)

10 Workplace Lighting (usage dependent)
Portal Tax estimates that 96% of businesses that own their own properties, or commercial property owners, could be owed a refund. ... In one case allowances worth as much as 68% of the purchase price were found. ...”
There's nothing to suggest that these attractions and advantages are open to solicitors only; one rather hopes and imagines that patent and trade mark attorneys, IP consultants, innovation gurus and the like would equally qualify for these tax breaks.  There may be a considerable number of readers of this blog who own and may be disposing of their work premises, particularly those who work at home or in that cosy shed at the bottom of the garden.  They may also be deterred from maximising their tax efficiency for any number of reasons, including
  • the cost of their accountant's services
  • inability to understand more than about one word in every ten that their accountant says to them
  • time spent dealing with accountants is time spent not dealing with clients
  • the cost of complying with the accountant's insatiable demand for miscellaneous pieces of paper and information before they can even find out whether the tax relief adds up to more than whatever their accountant charges them
  • the nervous strain, tension, pain and suffering of having to deal with their accountant
and so on.  But seriously, if there is any benefit to be derived, this avenue of relief is surely worth exploring.


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