Pharmacy contractors can claim thousands of pounds in tax benefits available from their commercial properties.

Most businesses are aware that they can claim substantial tax relief on purchases or investments required to run a business, known as Capital Allowances. This tax relief applies to plant & machinery, buildings and Research and Development (R&D) to enable a business to deduct a proportion of these costs from their tax bill.

Most accountants will have a standard routine for taking companies through an assessment of what they can claim, with the aim of collecting all applicable Capital Allowances and maximising the tax benefit to their clients. However, a good property capital allowances expert will look further, highlighting items embedded deeper in the business. Uncovering this extra layer of allowable items can add thousands of pounds to a business’s total tax savings.

The NPA has partnered up with Capital Allowance Review Service to help members claim back these hidden allowances. Where contractors have spent capital buying or improving commercial property, the firm can recover tax paid and reduces tax liabilities from rental income or trade profits.

Paul Roberts, Director at Capital Allowance Review Service says: “The fact that pharmacies are a commercial property is the pertinent point. If it’s a commercial property and they’re liable for UK tax, they have every bit of much of entitlement to make the claims to Capital Allowances.”

He explains that Capital Allowances come into two categories – “movable” and “immovable items”.

“All the items that you can pick and walk away with are movables. The immovable items are screwed in, nailed in, plastered in or bricked in, or in essence embedded in the building which means they are not movable. That is the categories of plant and machinery that are invariably missed and where there is a higher tax benefit going waiting to be claimed.”

He says that there’s a list of “fairly basic, simple items that have functionality” in a commercial property and “everybody assumes they’re part of the building so they don’t bother with it”.

Potential items for tax relief can include: heating systems, such as radiators and associated connections; air conditioning and air cooling systems; Hot and cold water systems; electrical systems, including lighting systems, wiring, trunking; External solar shading; sanitary ware; Burglar alarms, re alarms, and security systems; Fittings and built-in units (Door furniture/ironmongery, kitchen and base units, worktops, shelving, nosing for steps, cupboards, wardrobes, cookers, fridges, mirrors, re escapes and towel dispensers).

“You can’t have a commercial property without these things in there,” added Paul.

“How do you work without heat? How do you work out communication and telephone points? You can’t do it. Non-slip floors in toilets. You couldn’t use it if it didn’t have a non-slip oor. This is plant and machinery for the purpose of the trade.”

Paul believes that pharmacies carrying out more clinical services actually gives contractors more of a reason to apply for capital allowances.

“The clinical issue is probably going to be a better yield because we know if you’re going into that kind of environment you more items to make it functional and pass the legislation,” says Paul.

“Much of that would qualify for Capital Allowance expenditure.”

What support is provided by Capital Allowance Review Service?  

• Consultancy service taking full responsibility preparing and submitting Property Capital Allowance claims to HMRC on member’s behalf.
• Advice line for members buying/selling commercial property.
• Guidance given on legal property documents e.g. CPSE, S198 election and contracts.
• Provide support for Accountants and Solicitors.
• We help collate information from member’s advisors.

What do NPA members get as added value?

• Preferential rates due to NPA membership.
• Con rmation of claim availability prior to formal engagement. • Stay in touch with changes in legislation, HMRC updates and useful information (subscribers only)

For more information go to www.npa.co.uk/servicesandsupport/business-support/partner/capital-allowance/