Office Refurbishments and Capital Allowances

An office refurbishment or relocation can be a costly exercise, so there are advantages to seeking advice from your contractor. An experienced contractor can guide you on everything from half flush WC systems to low cost air con units, ensuring your space is both functional and cost effective. In this guest blog, RIFT Managing Director Bradley Post discusses another way to make the most of your money when undertaking an office refurbishment – through capital tax allowances. The RIFT Group specilises in helping clients to claim back tax refunds and, since 1999, has amassed a total of £153m. Are you undertaking an office refurbishment? If so, then you could claim back tens of thousands from the Government. Capital Allowances are the only form of tax relief on capital expenditure incurred on commercial property. They provide an effective way of reducing the ‘after tax’ cost of acquiring, building and refurbishing a property. If you’ve recently fitted out or refurbished your own commercial property, are you absolutely sure you have claimed all the tax allowances available? If you are about to rip out a commercial building for a refurbishment project, stop and take stock of what you have before you make any changes. The capital allowances legislation not only allows you to reclaim eligible items, but also to claim for the expenditure of the previous owner if they haven’t claimed. As 90% haven’t, the chances are very high. By taking time to consider capital allowances before the refurbishment project is carried out, specialist surveyors can analyse the building and value the previous owner’s expenditure. Things like air conditioning, lighting, lifts and toilet facilities can be valued before they get ripped out and replaced. You can then collate the costs of your own refit and add this to the total qualifying expenditure to reduce your tax bill. For those refurbishing buildings, the capital allowances involved can be extremely lucrative. If you’re thinking about refurbishment or renovation, the return on investment is nothing to be sniffed at. The bottom line is – if you’re carrying out refurbishment works you can potentially claim up to 100% as capital allowances, depending on the nature of costs. As a corporation or personal taxpayer, this can be a highly effective way of reducing your tax bill. Too often accountants and business owners miss this because the rules are highly complex. To be eligible you must be a UK corporation tax or personal taxpayer, but if you are a public body, charity or own your property through a pension fund you cannot usually benefit. As well as being eligible for capital allowances, other financial benefits can be gained. A refurbishment, in particular, provides a great opportunity to enhance the income and performance of an older building in most financial city centre locations. For many cities across the UK with beautiful historic or older buildings, the desire to keep properties with character in a good location means refurbishment is an increasing trend. The fact that the returns on this work are significant is an added bonus. So whether you are buying property and need to completely renovate, or an existing owner needing to upgrade and preserve your premises, make sure you’re up to speed on the financial returns available to you.

For more information on Office Refurbishments and Capital Allowances talk to Rap Interiors