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bigduckontax, Accountant
Category: Tax
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Can you give me a laymans guide to capital allowances. What

Customer Question

Can you give me a layman's guide to capital allowances. What qualifies for Building allowance and what qualifies for ordinary annual allowances. I am having a new Premises constructed and fitted. Wholesaling is my line of business and trade through a Limited company. I do have an Accountant but i want some knowledge before i can discuss the matter with him in more detail.
Your help would be appreciated
Submitted: 3 years ago.
Category: Tax
Expert:  bigduckontax replied 3 years ago.
Hello, I'm Keith and happy to help you with your question.
Buildings allowance is available at 4% writing down allowance for, according to HMRC:
'Industrial buildings allowance is available to the person holding the 'relevant interest' in the building. The definition of relevant interest is discussed in CA33000 onwards, but it is generally the interest in the building which the person constructing it had when they incurred the construction expenditure. It is usually a freehold or leasehold interest. The holder of the relevant interest might be:
A taxpayer who carries on a trade in an industrial building himself, or
The lessor of an industrial building in which someone else carries on a trade.'
HMRC Notice CA32205 gives a table of those buildings classed as "industrial' and your activity is top of the list!
Your capital allowances for this activity should therefore be based on the 4% rule.
I do hope that helps you before you go into bat with or against your accountant.