Retail surgery: Can premises owners get tax rebates through unclaimed capital allowances?

Firstly, it’s true. Specialist capital allowance firm CA Tax Solutions estimates that the average size of unclaimed capital allowances for retail premises is about £50,000. What’s more, director Dave Collier says that recent work it has carried out for a number of retailers has uncovered far bigger unclaimed capital allowances than that. “We estimate that about 90% of retailers will have the right to some level of claim,” says Collier.

The problem, historically, has been that identifying capital allowances within commercial properties is extremely complex and a very specialist area, so much so that even accountants only scratch the surface. “Few commercial property owners have been properly alerted to it and have had the tax rebates they are due,” says Collier. There is also a myth that capital allowances only apply to larger commercial properties - they can also be claimed by smaller retailers.

So what exactly are capital allowances? “They are basically costs incurred on the acquisition of, or when additions are made to, a commercial property - a shop, warehouse, head office or factory, for instance - that can be reclaimed against tax and used to reduce its tax bill,” says Collier. “The chances are your accountant will claim on more obvious items such as shutters, floor tiles or carpet, but generally speaking they will not drill down to the items where the far more significant costs to a business lie.” Such areas might include air conditioning or security systems, for instance.