Capital Allowances on New Build, Refurbishment and Extension Projects
Many businesses assume Capital Allowances only apply when purchasing an existing commercial property. In reality, significant tax relief may also be available on new build projects, refurbishments, extensions and fit out works.
Whether you are constructing a new commercial building, refurbishing existing premises or extending your property, qualifying expenditure may exist within the project costs that could be eligible for Capital Allowances.
At CA Select, we specialise in identifying qualifying expenditure hidden within construction and refurbishment projects, helping businesses maximise available tax relief.
New Build Projects
A commercial new build often contains substantial expenditure on assets that may qualify for Capital Allowances.
Commercial properties often contain qualifying embedded fixtures such as:
- gosodiadau trydanol
- systemau goleuo
- systemau gwresogi ac aerdymheru
- systemau larwm tân
- security systems
- lifftiau
- llestri glanweithiol
- systemau dŵr oer
- specialist fit outs
- gosodiadau mecanyddol
Whilst the building structure itself will not usually qualify for Capital Allowances, many of the fixtures and systems installed within the building may be eligible for relief.
In addition, qualifying structural expenditure may attract Structures and Buildings Allowance (SBA). An SBA can be claimed on new build projects commencing on or after 29 October 2018. The amount to be claimed when introduced was 2% per annum of the building cost on a straight line basis, this has now been increased to 3% per annum.
Mae rheolau arbennig yn berthnasol i safleoedd Freeport lle gellir hawlio 10% y flwyddyn.
Refurbishment Projects
Refurbishment projects frequently create some of the strongest Capital Allowances opportunities.
Businesses often invest significant sums upgrading or replacing building services and infrastructure without realising that part of the expenditure may qualify for tax relief.
Common qualifying expenditure includes:
- Rewiring and electrical upgrades
- LED lighting installations
- Systemau gwresogi ac aerdymheru
- Fire and security systems
- Data networks and communications infrastructure
- Specialist commercial equipment
- Certain washroom and welfare facilities
- Mechanical and electrical services
A detailed review can often identify qualifying expenditure that may not be obvious from invoices or accounting records alone.
Extensions and Fit Out Projects
Extensions, alterations and commercial fit outs can also generate valuable Capital Allowances opportunities.
Examples include:
- Office fit outs
- Retail fit outs
- Restaurant refurbishments
- Hotel upgrades
- Industrial unit improvements
- Warehouse developments
- Commercial extensions
Many projects contain qualifying fixtures and systems embedded within overall contractor costs, making specialist analysis particularly important.
Common Qualifying Assets
The following items frequently qualify for Capital Allowances when installed as part of a commercial construction or refurbishment project:
Examples include:
- Systemau trydanol
- Lighting installations
- Heating systems
- Air conditioning
- Systemau awyru
- Systemau dŵr oer
- Larymau tân
- systemau teledu cylch cyfyng
- Security installations
- Data cabling
- Lift installations
- External solar shading
Every project is different and the level of qualifying expenditure will depend on the nature of the works undertaken.
Why Review a Project?
Many businesses engage contractors, architects and quantity surveyors to deliver a project successfully but do not carry out a specialist Capital Allowances review afterwards and contractors do not usually provide the necessary details on invoices to enable a client’s accountant to identify the costs relating to specific assets qualifying for Capital Allowances.
Mae manylion megis ‘tystysgrif interim’, ‘gwaith fel y cytunwyd’ neu ‘fecanyddol a thrydanol yn unol â manyleb yr adeilad’ yn annigonol.
We will provide a detailed analysis and costing of all assets qualifying for Capital Allowances. As a result, qualifying expenditure can be overlooked.
A review can help:
- Identify qualifying expenditure
- Maximise available tax relief
- Support discussions with your accountant
- Ensure opportunities are not missed
- Provide documentation to support a claim
Sut y gall CA Select Helpu
CA Select works alongside accountants, tax advisers and commercial property owners throughout the UK.
We specialise in identifying Capital Allowances opportunities within commercial property acquisitions, refurbishments, extensions and new build projects. As well as the contractor costs, a proportion of preliminary expenses, builders work in connection and professional expenses can also be added to a Capital Allowances claim. In our experience these costs could be between 15% – 30% of the total project expenditure but because accountants are not quantity surveyors they often miss this valuable addition to the Capital Allowances claim.
Our reviews are designed to establish whether a worthwhile opportunity exists and provide clear guidance on the next steps.
Request a Free Initial Review
If you are planning, undertaking or have recently completed a commercial construction, refurbishment or extension project, we can provide an initial review to assess whether a Capital Allowances opportunity may exist.
No obligation.
No claim, no fee.
All enquiries treated confidentially.
