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Author: Matthew Jeffery, Tax Director

Talking Tax: January 2022

The capital allowances team had a busy end to 2021.  This was driven mainly by companies with 31 December year ends.  In total, we assisted 22 different clients identify claims for capital allowances, unlocking over £5.4m in unclaimed capital allowances.  Below is a summary of three interesting cases we worked on:

Holiday Homes & Luxury Lodges

Zeal carried out a capital allowances review for a company that owned a site containing luxury lodges and a selection of holiday let properties.  Zeal identified that there were unclaimed capital allowances on the c.£600k refurbishment costs incurred to convert outbuildings to holiday lets in 2015 and on the £500k purchase of a residential property in 2013 that is also used for self-catering accommodation.  Unfortunately, there was no scope to claim any capital allowances on the purchase of the luxury lodges site, but we did identify that no claim had been made on two buildings erected on site in 2016.   

As the client had a year end of 31 December, the team worked hard to get all the claim reports completed and submitted to HMRC in advance of the year end.  This enabled the client to obtain a repayment of corporation tax paid for 2019 and 2020.  In total, Zeal identified £585,150 of unclaimed capital allowances, resulting in a cash repayment of £23,390 and future corporation tax savings up to £110,000.

Care Homes 

We were very pleased to complete our annual capital allowances review for a long-standing client in the residential care sector last month.  This year included the purchase and refurbishment of a 90 bed care home and the construction of two state-of-the-art care facilities.    

Working with the project manager and accounts team, Zeal drafted the claims.  We then liaised with the clients accountants to finalise the claim reports and reconcile them to the relevant accounts and tax computations, ready for submission to HMRC.   The capital allowances identified were in excess of £10m, which will save the Group up to £250,000 in corporation tax.

Commercial Property Landlord 

Following a referral from one of our accountancy firm partners, Zeal carried out a capital allowances review of a portfolio of commercial property acquisitions for an independent landlord. The properties were mainly industrial units and offices. 

Of the 22 commercial properties owned, Zeal identified entitlement to claim on 7 property purchases. This resulted in over £1.2m in unclaimed capital allowances, securing up to £300,000 in future corporation tax savings. 

January 2022

January is the busiest month of the year for the capital allowances team due to the deadline for filing amended 2019/20 self-assessment tax returns at the end of the month.  By realising a missed claim for capital allowances on property owned personally in January, our clients are able to reclaim tax paid for last year and reduce tax bills due for 2020/21.  We will be working with a range of clients this month, from Hotels, holiday lets, B&B’s, caravan parks, pubs and restaurants to Children’s Nurseries, Care homes and offices.  

If you own a business property or have clients that do, get in touch with the team to see if they can save tax this month.