Easing your cash flow with Capital Allowances

The last few months have been challenging times for businesses across the country and cash flow is still the topic on everyone’s minds. Even though the government have put a number of support measures in place, it’s important for business owners to explore all available options.

Maximising available tax relief, such as Capital Allowances could be the cash injection your business is looking for - and unlike the loans on offer, they don’t need to be paid back. Relief for Capital Allowances is a qualifying deduction for tax purposes and in certain circumstances, can even unlock cash tax repayments from HMRC to assist with cash flow.

What are Capital Allowances?

In short, Capital Allowances offer you relief on costs incurred on qualifying equipment, machinery and internal building fixtures used within your business. With the relief stretching up to 100%, it can really help to ease your cash flow during these uncertain times. Like many other business owners, you may not be investing in assets in the current economic climate.

However, all is not lost - you can claim for assets you have already bought. As long as your business still owns and uses them, you can claim for these assets in an open tax return, irrespective of when you bought the asset.

Am I eligible?

The eligibility criteria is somewhat complex. ‘Eligible expenditure’ varies from case to case, and the treatment of your claim very much depends on where the asset sits within your business. Navigating through this can be a complex ordeal, so we would always recommend consulting a specialist on the matter, to ensure you get the most out of your claim.

Capital Allowances and property

If you have purchased any property and undertaken any property improvements in relation to your business or trade, then it is definitely worth looking into the relief. Whilst the costs associated refurbishing or improving property can be huge, the good news is that it’s more than likely that you will be able to take advantage of Capital Allowances tax relief on some of the expenditure.

Such expenditure could be on, but not limited to, the following; new constructions, extensions, refurbishments, fitting out or even the purchase of a newly completed or existing building. Criteria eligibility is vast and costs could be huge, therefore it is advisable to review the Capital Allowances entitlement and understand the pooling and fixtures requirements. It is important to identify all eligible expenditure to ensure the claim is being maximised.

Without a specialist team looking at this in depth, costs that could have been eligible may be missed and ultimately tax relief could be lost.

How can we help?

Our tax incentives and reliefs team are on hand to support you throughout these uncertain times. Get in touch to see how we can help with your Capital Allowances claim.