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taxadvisor.uk
taxadvisor.uk, Chartered Certified Accountant
Category: Tax
Satisfied Customers: 4983
Experience:  FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
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I have been in the landscaping business a few years and presenting

Customer Question

I have been in the landscaping business a few years and presenting accounts as such. I am now intending to use the skills to build a basic, 'rural', holiday unit to let.
Strictly speaking this looks like a new business, and therefore the expenditure would be deemed capital, (and not the running costs of the landscaping work?)
Assuming so, what capital allowances are claimable in the first year, and Year 2, Yr. 3, etc.
Submitted: 1 year ago.
Category: Tax
Expert:  taxadvisor.uk replied 1 year ago.
Thank you for your question..Capital allowances available depend on the nature of expenditure... The term plant and machinery has broad definition for capital allowances purposes. If your expenditure falls in this category, then you can claim annual investment allowance of 100% in Year 1. More information on capital allowances and CAs main rates can be found herehttp://www.rossmartin.co.uk/capital-allowances-75082/315-capital-allowances-rates-and-allowances I hope this is helpful and answers your question.If you have any other questions, please ask me before you rate my service – I’ll be happy to respond.
Customer: replied 1 year ago.
I am primarily interested in building materials, roofing, internal construction and decor. Are these regarded as 'plant', or which category would they fall under. please? AIA?
Expert:  taxadvisor.uk replied 1 year ago.
Thank you for your reply.Building materials, roofing and internal construction would not form part of plant and machinery for CAs purposes. This is additions to the land and building cost and woudl be available for allowance when working out gain on sale. Decorating would be and is confirmed here (claim AIA 100%)http://www.hmrc.gov.uk/manuals/camanual/CA21130.htm I hope this is helpful and answers your question.
taxadvisor.uk and other Tax Specialists are ready to help you
Expert:  taxadvisor.uk replied 1 year ago.
I thank you for accepting my answer.
Best wishes.
Customer: replied 1 year ago.
A supplementary, if I may? Exactly under what category, and at what rates, would I be able to claim as capital allowance, the costs of 'general' building materials, (and even some labour), please?
Thanks,AW
Expert:  taxadvisor.uk replied 1 year ago.
Thank you for your supplementary question..Buildings don't qualify for capital allowances. There are certain types of expenditure within a building that would qualify for capital allowances and it is covered herehttp://www.out-law.com/topics/tax/property-tax-/capital-allowances-on-property-transactions/Any expenditure on building that does not qualify for capital allowances is added to the cost of the building as additions and comes into play when you sell it. These costs reduce the gain made on sale thus reducing capital gains tax payable. I hope this is helpful.
Customer: replied 1 year ago.
Many thanks; that's the clarification I needed.AW
Expert:  taxadvisor.uk replied 1 year ago.
You are welcome.Best wishes