Unclaimed building allowance could exceed £2bn

Analysis from the HMRC estimates that as much as £2.1bn of tax may have gone unclaimed since the implementation of the Finance Act 2012 in April last year.

Its calculations were based on 114,560 non-residential property transactions that took place over the following 12 months, 10% of which were predicted to quality for capital allowance on purchases in excess of £500,000.

HMRC calculated that multiplying the number of transactions by the average price of £4.72m saw overall property worth in excess of £54bn.

It estimated that nearly £11bn of property transaction could be eligible for 20% capital allowance, resulting in the £2.1bn figure.

With final decisions on building refurbishment and equipment upgrades continuing to be made mainly on price, the claiming of capital allowance could result in more work for building services suppliers.

Catax Solutions managing director Mark Tighe said any commercial property owner that had not claimed the allowance would “have a bitter taste in their mouth” when thinking about lost tax relief.

“What comes as no surprise is the continued lack of awareness of the potential for capital allowances relief that could be claimed on those properties where transactions are still proceeding,” he said.

“Property owners are still missing out on the potential for substantial tax rebates – rebates that could be lost in perpetuity if they’re unclaimed at the point of sale.”

Article published by RACPLUS

 
 
 

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