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ReCap: What is it?
ReCap is the trademark name of Abbey Tax’s Capital Allowance Service that is designed to assist business owners to obtain Capital Allowance claims retrospectively, thereby obtaining repayments of tax.
The repayment of tax arises from the fact that businesses can claim tax relief against trading profits for expenditure on Plant and Machinery. This includes the cost of equipment, but only specialised knowledge recognises that it also includes a substantial part of the cost of the building – and it is usually much more than people realise – which contain ‘fixed’ or ‘immoveable’ Plant and Machinery.
Most businesses owners assume their accountant has already dealt with the required claim for Capital Allowances (CAs), and in the majority of cases the exercise will have been done………but not to its full potential. So, in our experience, there is often a large claim that can be made.
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Who can benefit?
Potentially, ReCap is suitable for all businesses which own property or for individuals who lease out property commercially. It is most likely that there will be more fixed Capital Allowances in buildings where certain trades are carried out; for example:
• Hotels
• Care Homes
• Restaurants
• Pubs and nightclubs
• Caravan parks
• Office buildings
In fact, any properties requiring Health and Safety regulations, fire precautions, security, and building regulations are likely to reveal substantial fixed Plant and Machinery.
However, we will consider all properties which are ‘valued’ at more than £250,000 (‘value’ being the purchase or acquisition price of the property including any subsequent improvements).
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Frequently asked questions
Q1. What are Capital Allowances?
A1. Capital Allowances (CA’s) are a tax deductible allowance which can be set against business profits; CA’s are an annual claim for Plant & Machinery and Fixtures & Fittings such as desks, chairs, tables etc.
Q2. So what are ‘fixed’ or ‘immoveable Capital Allowances’?
A2. These are items of Plant & Machinery that also qualify for CA’s but might be considered to be part of the building; for example toilets, baths, sinks, air conditioning.
Q3. But surely my accountant has already claimed for these?
A3. It is possible that he/she has made a claim, but have you told your accountant that these items are in the property or has your accountant conducted a survey to value these items? Even if he/she has this information there could still be a wealth or further fixed Plant & Machinery that hasn’t been identified; for example ceilings that have air conditioning units can qualify as, too, can fire doors and all other fire security equipment – the same applies for general security equipment.
Q4. So does this mean that my accountant has been negligent because he/she hasn’t identified the fixed CA’s in my property?
A4. Not at all. Finding the fixed CA’s in a property takes various skills – surveying, quantity surveying and tax & accountancy expertise. It is also very time consuming, so you might not thank your accountant for incurring significant fees without any certainty of reducing your tax bill.
Q5. So what do you charge?
A5. We will work on a contingent basis. This means that we will only charge you if we find fixed CA’s in your property – no CA’s found, no fee
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