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Many may be aware of how Embedded Capital Allowances can be claimed, but we often get the question of why can they be claimed. Property owners ask why these allowances are available, why have they not heard about this concept before and why so many owners are yet to make a claim, amongst other queries.

Starting from the beginning, Capital Allowances were introduced by HMRC as an incentive to encourage investment into commercial property and to kick start the economy. Tens of thousands of Capital Allowance claims are processed by HMRC every year. We always stress to our clients the importance of seeing these allowances as a right, not a privilege. Initially, some may suspect that this is a tax loophole or avoidance scheme, however this is a completely legitimate form of tax relief for commercial property owners who may have been overpaying a great deal of tax on important items within their property, such as air conditioning and specialist lighting, which are fundamental to the running of a commercial property.

Upon hearing of their potential to claim, some property owners wonder why their accountant hasn’t already dealt with any Capital Allowance claims. However, it is unlikely that accountants will have done a claim because a specialist team (such as ours) are required to identify and process claims, as well as a detailed knowledge of the HMRC guidelines and manuals, which is why many property owners are yet to make a claim on their property. We work closely with accountants to prepare the report and ensure that the figures provide the best possible benefits for their clients.

Not only are accountants expected to deal with Capital Allowance claims, solicitors are also often expected to advise their clients on this area of tax. As with accountants, the majority of solicitors do not specialise in this area of tax law, and many have found themselves in a situation where they are being asked to advise on this area of tax that they do not feel fully comfortable with, which can leave the client ill-advised or given advice that can prejudice their rights on this matter going forward. This is another reason why some commercial property owners are unaware of their potential to claim and why we work with solicitors to provide our service and expert advice to their clients to avoid litigation and to help the client receive the money they are entitled to.

If you think you could have a claim on your commercial property, then get in touch with a member of our team today to see if you are eligible to claim Embedded Capital Allowances. As we frequently state, it is your right, not privilege, to claim the tax refunds you are entitled to.