Capital Allowances are a valuable form of tax relief available to anyone incurring capital expenditure buying or building commercial property which can significantly boost the post-tax yield of an investment as well as potentially generating immediate cash value via tax repayments through a review of current and historic expenditure. We had worked with a manufacturing client who had incurred a significant amount of expenditure purchasing new manufacturing buildings and equipment. The client was already familiar with Capital Allowances and R&D Tax Credits, but did not consider making claims for Research and Development Allowances (“RDAs”).

  • We worked with the client to discuss their capex projects identifying where activity in the building was in connection with the R&D projects and establishing the extent of the RDA claim. 
  • Following the initial scope we had worked with the technical and finance teams to gather the relevant information to quantify the claims.
  • Further discussions were held to gather additional supporting documentation which would form part of the report submission to HMRC.

The good news is that there is no time limit for re-categorising expenditure previously categorised as non-qualifying. However, with RDAs there is a 2 year time limit from the end of the claimant company’s accounting period (similar to R&D Tax Credit claims).

Have you incurred any capital expenditure (i.e. purchase any land or buildings, plant or machinery or refurbished any existing property) in the past few years that could attract this generous tax relief?

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