Companies are being urged to move quick to take advantage of little known new tax changes that can allow them to give their premises a much needed facelift and help drive forward growth.
Scotland’s leading workplace design experts Space Solutions has teamed up with Chartered Accountants and Business Consultants Atkinson Donnelly to highlight a raft of tax breaks that Chancellor George Osborne maintained in his June 22 Budget.
During this continuing storm of the recession, many businesses are looking to embark on change within their business – whether optimising current space, downsizing, relocation, or carrying out refits and refurbishments – but are concerned at the expenditure involved.
Derek Binnie, Director of Space Solutions, said: “A key priority for clients is to get the right advice at the earliest stage to assure they get best value. Through these early discussions with our clients, where we focus on designing the optimum solution and maximising the budgets, it became apparent few are aware of the tax benefits recently announced in the Budget.”
The changes – offering firms the chance to maximise the money available to them through tax reliefs – were first outlined in the pre-election Budget.
The key change is the increase in the Annual Investment Allowance (AIA) for expenditure on plant, machinery, fixtures and fittings, which has doubled from £50,000 to £100,000. The latest Budget will see the AIA reduce to £25,000 from April 2012 to re-balance the reduction in Corporation Tax – highlighting the need for firms to act now.
Through sensible tax planning, tax savings on £100,000 qualifying expenditure can be as much as £28,000 for companies and up to £50,000 for other businesses.
Betty Glancey, Senior Tax Manager at Atkinson Donnelly, said: “It makes sense to investigate all opportunities to increase the tax savings that you have available to you. You could be able to afford what you once thought was unaffordable.
“And what Mr Osborne’s Budget has told us is that there more reason than ever to move now to maximise reliefs for capital allowances at present rates.”
Both Space Solutions and Atkinson Donnelly believe that the most successful tax relief claims are achieved when specialists work closely together early in the design process.
Some of the benefits of this planning can be:
- Factoring of the value of allowances into financial costing exercises and options
- Allowing the value of a construction work associated with installation of machinery, fixtures and fittings to possibly increase the tax savings.
- Optimised claim values, fewer HMRC queries and a stronger negotiating position
- Early identification of items likely to be challenged allowing for supporting evidence to be compiled
- Capturing contemporary documentary evidence
The new allowances can also serve to enhance tax losses in situations which, when carried back against years where there may have been a tax liability, could result in actual tax repayments from the HMRC.
Space Solutions is Scotland’s largest independent workplace solutions company, helping businesses manage changes within the workplace. It operates UK-wide – from bases in Aberdeen, Edinburgh, Glasgow, Dundee and Livingston – to design, build, fit out, refurbish and relocate modern and productive business environments.
*The advice given here acts as a general overview of the benefits that tax reliefs could bring to a business but no action should be taken based on this information without advice from professional advisors.