News

Tuesday 30 August 2011

Time running out to make Capital Allowances claims

Have you purchased your surgery premises? If so then there is Tax Relief possibly available to you, but time maybe running out to make the claim.

Some GP’s have taken up the opportunity to purchase their premises, either from a developer or their PCT, and by doing this have benefited from legislation that enables tax relief to be gained.

Certain elements of the building such as electrics, heating and ventilation, lighting, sanitary ware, water systems and many more, are deemed to be plant and machinery for the purposes of the trade and therefore allowable for capital allowances. It maybe the case that 20% of the purchase price could become tax deductible, so it is of significant value.

The process of placing a value on the qualifying elements is determined in HMRC manuals and is a surveying and valuation process, therefore a process that your accountant will not be able to undertake.

It has been possible to apply the legislation to premises purchased many years ago, which has often resulted in some GP’s obtaining a tax refund but also bringing the value into a current accounting period to reduce tax liabilities going forward.

However, times are changing, and as announced in the last Budget statement there is a consultation to look at amending various tax allowances and included in this are capital allowances. The amendments are likely to take effect from April 2012.

The main aspect of which will likely restrict how far back you can go, and this could be only two years. So if you have purchased over two years ago now is the time to investigate the possibility of having the valuation undertaken and included in your tax returns.

This review can be provided, without cost, to assess the possibilities and you are advised to contact GP Surveyors to discuss this further.

Capital Allowances are also available against construction projects and refurbishments, and it is advised that professional advice is taken to ensure maximum tax relief is obtained. Again, this is available through GP Surveyors as indeed any advice relating to structuring the holding entity and construction of the premises.