Talking Tax: March 2022
Author: Matt Jeffery, Managing Director
The extension of the tax return filing deadline meant our capital allowances team were busier than usual in February. In total, we assisted 28 different clients identify claims for capital allowances, unlocking over £3.7m in unclaimed tax relief. Below is a summary of three interesting cases we worked on:
Capex Review of Caravan Parks in West Scotland
Zeal was referred a client from an accountancy firm we work with in Scotland. The client owned several caravan parks in Argyl, West Scotland. Zeal carried out a capital allowances review of the capital expenditure incurred by the business over the past 15 years.
Entitlement to claim capital allowances on embedded fixtures purchased with 2 parks was established. This enabled the owner to claim tax relief now on part of the purchase price paid for the caravan’s parks that related to embedded fixtures in land & buildings.
The client had also built holiday let properties on site. Although there were no detailed records of the build costs available, Zeal were able to assess the value of the qualifying expenditure using quantity surveying techniques. The review resulted in at least £73,000 of tax savings, of which £13,000 was received as a cash rebate.
Modern Office Building – Tyne & Wear
Having worked with a commercial property conveyancer in 2021 on a mutual client, they contacted Zeal in December 2021 to review the capital allowances position for their client on the purchase of a multi-million pound acquisition of a modern office building, in the North East. The capital allowances section within the CPSE (Commercial Property Standard Enquires document) was not completed by the Vendor and the solicitor wanted to make sure they were not missing an opportunity for their client.
Zeal contacted the Vendors accountants and were able to establish that no claim for capital allowances had been made by their client who originally built the property in 2015. It was subsequently agreed that the Vendor would pass on the benefit of the capital allowances to our client. To avoid holding up the sale, Zeal provided a contract clause, binding the Seller to the agreement.
Post completion, Zeal carried out the capital allowances claim and prepared the relevant tax election to transfer the allowances to the Purchaser. In total, our client will receive over £125,000 in corporation tax savings. They were thrilled with result and very grateful to their solicitors for introducing Zeal to them.
Children’s Day Nursery
As partners for business with the National Day Nurseries Association, Zeal have helped hundreds of nursery owners unlock the tax savings in their nursery buildings. Last month, we helped two nursery owners identify claims for capital allowances on the purchase of their buildings. Small Wonder Day Nursery was purchased in 2009 for £500,000. Our capital allowances claim resulted in £114,602 of qualifying expenditure and tax savings of £33,060. First Steps Day Nursery was acquired for £227,250 in 2017. It was a residential property on purchase and changed to a nursery by our client. As the property was ex-residential, our client could claim capital allowances on £61,227 of the £227,250 purchase price. As the owner is a higher rate taxpayer, the total tax savings amounted to £24,491.
In March, Zeal were thrilled to be shortlisted for an FSB Wales Celebrating Small Business Award in the ‘High Growth Business of the Year’ category. The business has grown over 300% since its conception in 2017 and last year, we identified almost £50m in unclaimed capital allowances for businesses (400% increase from £10m in year 1) unlocking £12m in tax savings and cash rebates for clients.
A few months ago, Zeal were also named as the 7th most rapidly growing company in Wales in the Fast Growth 50 list.