Capital Allowances continue to offer legitimate, yet under-exploited opportunities to reduce tax liabilities for a wide range of capital expenditure in relation to property. This capital allowances regime is legislated by HMRC and is an entitlement too valuable to be overlooked.

In these very difficult economic times, every business that is to survive must continue to maximise income and cut costs. Any business paying higher taxes than the law requires, is carrying an unnecessary burden that may prove damaging.

Capital Allowances are very valuable and will typically amount to between 20% - 45% of the purchase or construction cost of Commercial Buildings (Offices, Care homes, Hotels, Pubs, Holiday lets) which will reduce tax bills by many thousands of pounds and, on occasion, turn tax liabilities into actual repayments.

HMRC have issued a Consultation Document proposing changes to the way Capital Allowances claims for plant and machinery fixtures are handled. It is intended that any changes will be included in the Finance Bill 2012. The proposed changes could be effective from as soon as April 2012 and will have significant impact on all businesses, commercial property owners and investors.

Time is of the Essence – Act Now

Currently the proposals are under consultation and do not prevent additional claims being made before properties are sold - although it is likely that a 1-2 year period for submitting such claims will be imposed. We would therefore advise giving urgent consideration to making claims now where no claim has previously been made, or where under claiming has occurred.

Other tax planning opportunities are available to ensure that all the capital allowances that have already been claimed are retained.

In the light of current uncertainty, it is advisable to have your property investments reviewed, whether claims have already been made or not, to ensure that this valuable tax relief is not lost. There is nothing to lose and there could be a significant gain.

Act Now - In a few months' time it may be too late!