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Updates from the Clayton & Brewill team.

Capital allowance – use it or lose it!

24th February, 2015

The capital allowance limit plummets to just £25,000 on 1 January 2016. Doug Perry of Nottingham chartered accountants Clayton & Brewill,  encourages businesses to start planning their capital expenditure now – or miss out on a valuable tax break.

What are capital allowances?

Capital allowances help you to reduce your tax bill, by allowing you to offset some or all of the cost of purchasing qualifying items against the taxable income of your business.

Since April 2014, Clayton & Brewill has been helping businesses to benefit from the generous capital allowances limits of up to £500,000 for investment in new plant, machinery and equipment – equating to significant tax savings.

It's a key part of the government's drive to get UK businesses investing and building for the future but it won't be here forever – the capital allowance limit falls to just £25,000 on 1 January 2016.

What can you include in your capital allowance?

Doug Perry Clayton & Brewill

You can claim capital allowances for what your business spends on assets that it owns and uses in the business, such as buildings and renovations, tools, machinery, office equipment, computers, vehicles, pieces of plant and factory equipment. You can also include professionals' fees in your capital allowance claim, for example architect fees or planning costs.

As with all capital allowances, there are conditions that have to be met before you can claim them. And you can't claim capital allowances for the things that your business buys and sells as part of its trade (such as raw materials) and items that you lease.

Different rules apply for when and how you can claim your capital allowances, depending on whether you are self-employed, a partnership or a limited company.

Make use of your capital allowances before 31 December 2015

The key point to note is that time is of the essence as the current £500,000 limit is only here until the end of the year, so take care to ensure you can make any planned investments between now and the end of the year.

For help and advice with understanding what, when and how you can claim you capital allowances, contact Clayton & Brewill on 0115 950 3044 or send us an email and we'll be pleased to help.

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