Blog: Tax Talk – Entering the world of Capital Allowances

Date: January 16, 2019

By David Pearson, Capital Allowances Analyst at Catax.

Having recently joined the Capital Allowances team, my knowledge of Capital Allowances and tax, in general, was very limited. My previous background was working within purchase ledger solving stock queries and paying invoices, so this is a complete change, but one that I am excited about!

Starting something new can be a little daunting having limited knowledge, but the team have been very welcoming and great in helping me settle as well as being patient and accommodating when teaching me about Capital Allowances.

It’s incredible how much accountants are missing and how valuable our services are to our clients. Even when there is only background plant & machinery remaining at a property; i.e. wiring and plumbing; under the right circumstances we can still generate a fantastic benefit.

Not knowing too much of what Capital Allowances are, it’s interesting to know what extra tax relief you can receive and what is involved in the purchase of a building other than bricks and mortar. I’ve been with the company for three months now, and slowly I’m understanding what you can and can’t claim for within the purchase of a new property, be it the lighting, heating or the fire systems for example. It seems that a lot of commercial property owners have no knowledge of this area of tax relief and the number of potential claims appears to be endless. One of the many perks since joining Catax is being lucky enough to view toilets from a new and enlightened perspective and visiting bars and restaurants is a whole new experience for me now!

Within Capital Allowances, there are many rules and guidelines to remember regarding what installations qualify for tax relief. Not only that, the taxman is constantly changing the way in which Capital Allowances can be claimed by the taxpayer; from the Pooling Requirement introduction in 2014 to the increase in Annual Investment Allowance from £200k to £1m from 2019. Then just when I was getting to grips with the General Pool rate of 18% and the Special Rate Pool rate of 8%, together with the interaction between pre and post-April 2008 expenditure, they have decided to change the Special Rate Pool to 6% from April. You certainly have to keep on top of the legislation or risk being left behind!

I am excited to see what the future has in store for Catax, and I can’t wait to see the business grow and expand even further.

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