Capital Allowances

What can I claim and what can’t I claim?

Capital allowances can be claimed on assets that are owned by the business and used in the course of a business activity, e.g., equipment, machinery or business vehicle

Capital allowances can’t be claimed for the actual business premises but may be available on certain types of items contained within the premises, these are classed as integral features and apply to items such as electrical and water systems.

How does it work?

Ad Valorem can save you time and money by helping you with your tax returns. We will make Capital allowances are available at different rates depending on the nature of the asset, 18% for assets qualifying for the main rate e.g. for plant and machinery, 6% for integral features.  The rate applicable to cars depends on the CO2 emissions.  The amount of allowances available is apportioned for assets also used for non- qualifying purposes.

If you own business premises provided the property is being used for a qualifying trade, you may be able to claim capital allowances for the proportion of the property that relates to fixtures qualifying for capital allowances.  These are called “embedded capital allowances” and is historically a very under claimed allowance.  It applies to things such as toilet and kitchen fittings, the air conditioning or alarm system.

If you buy business premises you can also claim capital allowances on assets the previous owner used in their business, providing they also claimed allowances on the assets and the required election has been made.

Capital allowances can sometimes pose tricky problems as the rules can be open to interpretation, professional assistance is therefore invaluable to ensure the maximum allowances available are claimed, this is where we can help with establishing the allowances due and also with HMRC enquiries.