Is your care property sitting on thousands of pounds in unclaimed TAX relief?

Care providers who own their care property or have spent thousands of pounds to develop, refurbish and adapt the building, are likely due a tax repayment and future tax savings from HMRC.

Identifying and unlocking these tax savings requires experts in surveying and a form of tax relief known as ‘capital allowances’.  As it is not a service provided by an accountant, many care property owners have not made a claim and are completely unaware of the tax savings they could be benefitting from.

WHAT ARE CAPITAL ALLOWANCES?

Capital allowances are a form of tax relief for plant & machinery used in a business, like a care facility. Accountants will claim capital allowances on items like cars, furniture, computer equipment etc to reduce your taxable profits.

Capital allowances CAN’T be claimed on buildings, but they CAN be claimed on ‘Fixtures’ embedded within the fabric of the building. Items like electrical & heating systems, kitchens and bathrooms, even the door handles and carpets.

Capital allowances are available to all business, whether you are a sole proprietor, partnership or a Ltd company. Landlords of commercial properties can also claim.

WHY ARE THEY UNDERCALIMED?

When you buy a building (or even build an extension), the price for the different fixtures embedded in that building are not itemised out! A surveyor is required to assess the values for capital allowances claims.

Capital allowances within buildings is also a specialist area of tax legislation that is often overlooked or misunderstood by accountants and tax advisors. It’s not new and it’s not a tax scheme, it’s just historically only been claimed by the biggest businesses and wealthiest investors.   

WHAT DOES THIS MEAN FOR THE OWNERS OF CARE FACILITIES?

For buildings that qualify, a claim could result in a tax deduction of typically 25% to 40% of the original property purchase price (or construction cost). For example, if you spent £250,000 purchasing your property, you could be entitled to around £62,000+ in capital allowances.

For a basic rate taxpayer, this would save income tax and National Insurance contributions in the region of £18,000 – even more if you are a higher rate taxpayer!  A company would save corporation tax of around £12,000 at current tax rates.

Unfortunately, unless you incurred the expenditure within the last 2 years, the tax savings are received over several years to reduce future tax payments. However, as you can go back 1 tax year to claim the relief, 2 years’ worth of tax savings are received as a cash repayment!

MAKING A CLAIM

You are probably thinking this sounds really complicated and time consuming! In fact, it really isn’t! All that is required is a copy of your latest accounts and tax returns.

A surveyor would also visit the property to carry out a site survey. A detailed report is then prepared that is submitted to HMRC to support the claim for tax relief.  

HOW DO I FIND OUT IF I CAN MAKE A CLAIM?

To maximise your claim and ensure you stay compliant with UK tax legislation, it is recommended that you contact a specialist firm like Zeal Tax.  A short conversation with their team will quickly identify whether you can make a claim and how much you could be due back. Best still, there is no charge unless they can obtain over £1,000 of tax relief and you can pay fees out of the tax rebate received.

Who are Zeal Tax?

The team at Zeal have had unprecedented success agreeing claims for care providers. They offer a risk-free service and do not charge any fixed or upfront fees. The process is quick and easy requiring little input from property owners or their accountants – many owners receive their tax savings in as little as 4 weeks, achieving on average around £35,000 in tax savings.

TESTIMONIAL

“Initially we thought it was ‘too good to be true’ but no! Zeal’s fee was taken out of our first years tax savings with no upfront costs. We saved over £10k in this tax year and will save again next year.  So glad we allowed Zeal to work for us. We thought ‘ if it isn’t going to cost anything but we may save a lot, why not?’. Highly recommend!” D&D Linton Ltd, South West of England.

FOOT NOTE

This article was written by Rhodri Taylor of Zeal Tax, a leading capital allowances specialist in the UK, as an educational piece to help Care England members understand their tax relief entitlement. Rhodri can be contacted either by calling 01633 742245 or by email on care@gozeal.co.uk. Zeal Tax offers a FREE, no obligation consultation and estimate of the tax savings and refund you could achieve.