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Capital Allowances (Tax Relief) on Plant and Machinery in Practice Premises
Building new premises or refurbishing existing premises is almost certainly going to involve expenditure on plant and machinery (e.g. heating, lifts and fire alarms) and on fixtures that are 'fixed' to the building (e.g built in furniture). Expenditure on these items is allowable for tax relief. For example: with a £1 million new build one could expect some £300,000 in allowances, which translates into £120,000 tax saved at the 40% rate. These allowances do not apply to refurbishments covered by an improvement grant and where premises have been purchased there is the chance that the previous owners may have claimed the allowances and they can only be claimed once.
Suffice to say this is a specialised area. Rather than confuse the issue by trying to explain it in more detail we would simply like to highlight that if you own premises that you have built or refurbished - this does not have to be recently and can go back many years - then it is an area that you might want to explore. For further information contact either your accountant or the LMC office.
AM Dec 08
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