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bigduckontax
bigduckontax, Accountant
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Other than getting a new building zero rated, what allowances

Customer Question

Other than getting a new building zero rated, what allowances would a new building attract - e.g. a new chapel of rest for an undertakers business?
Thanks
Submitted: 2 years ago.
Category: Tax
Expert:  bigduckontax replied 2 years ago.
Hello, I am Keith one of the experts on Just Answer and pleased to be able to assist you with your question. However, the news I bring will not be to your advantage. Here is an explanation from Jex Capital Allowances: 'Expenditure that will be classed as capital within property improvements will include items such as building work (i.e. the bricks and mortar cost), the windows in a new wall and the installation of utilities (e.g. electricity, gas, water and sewerage/ drainage). No capital allowances may be claimed for the cost of property improvements unless the property qualifies as an industrial building, however industrial building allowances are phased out. However, such systems provided specifically for the purpose of the underlying business may in certain circumstances be treated as plant and machinery, for example, lighting and plumbing for the toilets in a restaurant.' So that just leaves the possibility of certain expenditure being classed as Plant and Machinery. Such items are entitled to Annual Investment Allowance (AIA) up to 500K of expenditure and AIA is allowed at 100% The following [source Gov UK web site] constitute plant and machinery: 'Plant and machinery includes:items that you keep to use in your business, including carscosts of demolishing plant and machineryparts of a building considered integral, known as ‘integral features’some fixtures, eg fitted kitchens or bathroom suitesalterations to a building to install other plant and machinery - this doesn’t include repairsClaim repairs as business expenses if you’re a sole trader or partner - deduct from your profits as a business cost if you’re a limited company.' So some of the capital expenditure might be written off through an IAI.

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