Talking Tax: September 2022
Author: Matt Jeffery, Managing Director
With many of our clients operating in the hospitality sector, school half term and annual leave traditionally results in August being a quiet month for Zeal. However, we still managed to assist 29 different clients to identify claims for capital allowances, unlocking a whopping £4.7m in unclaimed tax relief. This will result in cash tax savings for our clients of at least £940,000! Below is a summary of two interesting cases we worked on:
Capital Allowances Review – Purchase of an Assisted Living Care Business
One of our largest clients acquired shares in a company who run an assisted living care business. The company owned 11 properties that provided 24-hour care for adults with learning difficulties associated with Autism.
Zeal carried out a capital allowances review of the properties owned by the company to identify any missed claims for tax relief. In total, the company had incurred approximately £3.6m to acquire the properties between 2009 and 2021. Zeal established that all of the properties were in residential use prior to acquisition and that no tax relief had previously been claimed on the purchase costs. This meant the company qualified to make a claim for capital allowances on a portion of the purchase price which related to fixtures acquired with the properties (e.g. electrical & heating system, kitchen, bathroom etc).
In summary, Zeal identified a total of £894,620 that qualified for capital allowances. This will result in total corporation tax savings of £169,978. By making the claim in the earliest open corporation tax return (year end 31 March 2021), a cash repayment of £40,402 was generated.
Zeal has a wealth of experience in the care sector. We have helped the owners of care facilities to unlock millions of pounds in unclaimed tax relief on the purchase, construction and refurbishment of buildings used for residential care. Zeal also recently became proud partners of Care England, and will ensure their members take advantage of any missed tax relief and only pay the right amount of tax. More information on this partnership can be found here: New Partnership with Care England • Zeal Tax (gozeal.co.uk).
Capital Allowances Review – Private Schools
Zeal was introduced to a private education provider in the South West by their accountants. The company was incorporated in 2018 by teachers with a vision to move away from a typical educational approach and introduce a real-world working environment. Over the past few years, the company has invested in acquiring and refurbishing buildings for use as schools.
No tax relief had been claimed on the property additions since the business started. The company had tax losses until 2021 and were due to pay corporation tax for the first time. This meant now was the perfect time to review the expenditure on buildings.
Firstly, Zeal carried out an entitlement review of the ownership history and contracts relating to the purchase of 2 old office buildings. Restricted claims were identified on both properties. Significant expenditure had also been spent post purchase to refurbish and fit out the properties. Although there were no detailed records available of the refurbishment costs, Zeal’s team of capital allowances experts were able to collate the level of detail required from the original contractors to claim the missed tax relief – a slow process, but our persistence paid off!
In summary, Zeal identified a total of £723,000 qualifying for capital allowances. This will equate to total corporation tax savings of £137,000. The corporation tax due 31 December 2022 of £32,000 was also eliminated.
Zeal are thrilled to announce that we have been shortlisted in the for Business Services Business of the Year in the 2022 South Wales Business Awards and recognised for providing outstanding customer service to our clients. This has always been a number one priority for us – our team are people focused and passionate about saving businesses tax. We hope Zeal will be triumphant at the awards which will be held on Friday 30th September and wish good luck to all the other nominees!
This month, Zeal also co-hosted a seminar with The Cardiff & District Law Society (CDLS) for the latest property update where Director, Matt Jeffery, provided insight on Capital Allowances for CDLS members. If you’d like to view the recorded presentation, please get in touch.
Coming up in October, our team are excited to be exhibiting at The Swansea Welsh Business Show and The Care Show, Birmingham, alongside our new partners, Care England. Team Zeal are also looking forward to attending The FinTech Awards Wales (following its’ postponement from September), as proud sponsors of the ‘Team of the Year’ category.