Scottish businesses could be missing out on significant tax rebates, according to new research by a leading accountancy firm.
Deloitte has said that up to 90 per cent of all UK businesses could be not claiming tax relief which could, ultimately, relate to 30 per cent of the purchase price of their premises.
The relief that is not being claimed in full is for capital allowances. The news could surprise many company directors, who would think their accountants were on top of capital allowance. However, while many basic expenditures will be claimed against, many others will not be.
The problem lies in the relative complexity of capital allowance. The process to claim is simple, but the confusion over what are legitimate ‘plant’ fixtures sees many businesses not claiming.
However, such fittings as air conditioning units, office equipment and security features are claimable.
Costs can also be claimed against a percentage of incidental costs, installation fees and project management charges. Specific costs related to the work can also be claimed against, such as transportation and craneage.
As companies in the country struggle to maximise profits, this tax break could be a vital boost to working capital, much as invoice factoring has provided over recent years.
The information will certainly come as welcome news to companies undergoing refurbishment. However, claims can also be made against older buildings, against fixtures and fittings where claims have not already been processed.
For work being undertaken, keeping itemised receipts will make the process easier. For older premises, retrospective audits can identify qualifying items.