Small business owners urged to check tax relief eligibility

28 April 2017

Small business owners could be missing out on thousands of pounds of unclaimed tax relief and are being encouraged to check whether they can claim with their commercial property.

Tax specialists Catax say many small commercial property owners in the UK are eligible for a rebate based on their spending on certain fixtures within the building, but 57% are unaware that such allowances exist.

People who could make a claim are those who own their own small business, such as a hairdresser or newsagent, or those who have inherited commercial property from a relative.


Owners of bars, restaurants, beauty salons, small shops and GP practices are examples of other property owners who are likely to be eligible for this tax relief.

The firm says nine-in-10 commercial property owners have never made a capital allowance tax claim and could be missing out on thousands of pounds. It says the typical claimant receives a tax benefit of £46,000, after accountancy charges.

This money is usually provided in the form of a cash lump sum and ongoing relief, but claims may only be made once.

Property owners are also being encouraged to take advantage of this tax break soon, because when a commercial property is bought or sold capital allowances can be lost. This follows a change in the tax relief rules in 2014.

Mark Tighe, CEO of Catax, says: “Anyone who owns a commercial property, even smaller buildings, could be in for a sizeable tax benefit through unclaimed capital allowances.

“For smaller businesses, those on the average high street for example, the tax benefit they receive can have a really positive financial impact.”


What are capital allowances?

Capital allowances are a form of tax relief that is available on the ‘intrinsic fabrication’ of a commercial property. This includes cabling, pipework, heating, lighting and air conditioning.

Mr Tighe says: “To explain this, picture yourself grabbing a local dental surgery, a typical high street commercial property, with both hands, tearing it from its foundations, turning it upside down and shaking it vigorously.

“This image of a dental practice held aloft with chairs, drills, mouth mirrors, patients and dentists all tumbling out is very useful in helping explain what capital allowances are.

“Essentially, everything that wouldn’t fall out of a dental practice if you turned it upside down and shook it — what’s referred to as the building’s ‘intrinsic fabrication’ — is what you can claim capital allowances tax relief against.”

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