Own your commercial premises or have incurred investment on a leased property in recent years?

If so, have you had a survey of your property to highlight the embedded fixtures & features (PEFFs) that qualify for tax relief?

It’s automatically assumed that information is readily available for the standard accounting routines to maximize tax relief from expenditure to buy and improve commercial property.

What happens when sufficient detail isn’t available? A lot of tax relief is missed however, not necessarily lost!

There’s no doubt that the accounting profession have established routines for assessing Capital Allowances and therefore it’s important to stress that we’re not questioning their ability. MSC R&D look to enhance the level of Capital Allowances and tax relief claimed by introducing additional disciplines that add value to their work. For example, a survey is completed on the property to identify items that are not visible within the paperwork and sit within Land & Buildings on the Balance Sheet (not Fixtures & Fittings)!

We work alongside business advisors and the accounting profession to maximise the tax benefits available to their clients by claiming the capital allowances on the embedded fixtures and features within their clients commercial properties. Accountants are restricted to the information provided to them and therefore are too often unable to maximise claims, resulting in businesses paying higher taxes.

Case Studies:

Leasehold Property Expenditure

Property Acquired – 2006          

Leasehold Improvements Spent – 2016

Claim Amount – £118,000

Total Tax Saving – £24,909

A client specialises in intelligent solutions for the public sector and traded from three units in which they owned the freehold of one and leased the other two.  Since the acquisition in 2006 of one unit, the company expanded and acquired the lease of additional units in 2016.

Outdoor Attraction

Total Spend £4,212,504

Total Claim £2,297,319 (55%)

Tax Benefit £459,463

Our client invested significant capital building attractions and completed substantial property improvements. A survey was required where invoices were vague ensuring the claim was maximized.

Serviced Office Block

Property Acquired  – 2001, 2003 & 2007

Total Property Cost: £1,187,000

Unclaimed PEFFs: £497,310

Our client owned three commercial properties acquired in 2001, 2003 and 2007 that were rented out as serviced office blocks in the Nottingham area.  Due to our client’s tax status, this meant that £99,468 of tax would be saved as a result of the PEFFs highlighted.  We were able to generate a tax repayment (cash) of £26,929 and reduce their tax liability by £72,539 in future years.

In 90% of cases we review, additional Capital Allowance are extracted from Land & Building and Leasehold Improvement costs.

Typically we uncover 25% of property costs and 50% of property improvements therefore creating a significant role in a business’s tax planning.

A PEFF review has the ability to recover tax paid and reduce tax liabilities.

Any business that has incurred significant costs to acquire and/or improve commercial property could benefit from a Property Embedded Fixture & Feature (PEFF) review.

For more information on the free-of-charge PEFF claim review service please contact Chris Roberts at croberts@mscbdg.co.uk.