Leaseholder / Tenant

Lifecycle

Significant amounts of money are now spent by tenants fitting out their office or retail space or modifying other rented space to make it fit for their business or trade. This expenditure is often capitalised meaning no immediate tax benefit is realised unless capital allowances are claimed.  If planned correctly a large proportion of the expenditure will attract valuable tax relief.

Outlined below are the issues that need to be considered at each stage of the project lifecycle to make sure the benefits from the tax relief are fully realised.

REFURBISH

+ Pre-plannning

Pre-plannning

The Issue: Often claims are made after the expenditure is incurred meaning any opportunities for designing and procuring in a more tax efficient way are lost resulting in reduced claims. This is particularly relevant for projects that involve high levels of mechanical and electrical installations and fit out expenditure that is heavily related to the occupiers trade.

How we Help:

  • We guide the design team through the eligibility criteria to claim the various types of allowances.
  • We review the project with the design team to highlight the areas where allowances can be enhanced.
  • We advise the design team on specification, design and contractor procurement matters to ensure all the relevant information is available to prepare the claim.

Benefit to the Client:

  • Connected: tax teams and design teams aligned towards a common goal.
  • Protected: A suite of project documents that fully support the claim thereby making the claims more robust in the event of an enquiry from HMRC.
  • Improved cash flow: A project that realises the full tax relief potential.

Why use TFI Group?

+ Preparing Claims: Refurbishment & Fit Out

Preparing Claims: Refurbishment & Fit Out

The Issue: Capital expenditure incurred on building or refurbishing property or fitting out premises under a lease is likely to attract significant amounts of tax relief but requires both a knowledge of tax legislation and building costs to ensure all allowable amounts are identified.

How we Help:

  • We review the project details and confirm the different incentives that could apply.
  • We engage with the design team to fully understand the project.
  • We review all relevant technical, design and commercial data.
  • We dissect and certify the qualifying project costs and allocate to the relevant pool.
  • We ensure the claim is fully reconciled to supplier’s final accounts and the project’s total spend.

Benefit to the Client:

  • Reassured: A robust and fully substantiated claim capable of withstanding any enquiry from HMRC.
  • Improved cash flow: A reduction in the amount of tax paid.
  • Cash from losses: tax credits available on expenditure incurred on remediation and on qualifying environmental plant and machinery.

Why use TFI Group?

+ Demolition / Refurbishment Audits

Demolition / Refurbishment Audits

The Issue:  The demolition of assets upon which capital allowances have been claimed is a disposal event for the purposes of assessing any future balancing allowances or balancing charges.  Failure to properly record demolished assets could expose the business to unwanted balancing charges on disposal.  Furthermore, the demolition costs themselves will also attract capital allowances.

How we Help:

  • We isolate the plant and machinery demolition costs.
  • We schedule out assets removed as part of the demolition works.
  • We calculate the disposal values and make sure the necessary adjustments are made in the Capital Allowances Pools.

Benefit to the Client:

  • Protected: against any unwanted balancing charges.
  • Improved cash position: more tax relief retained.

Why use TFI Group?

Corporate Services

+ Capital Allowances Pool Management

Capital Allowances Pool Management

The Issue: The Capital Allowances legislation stipulates that separate pools are maintained for different classes of asset.  However, businesses still fail to properly maintain their pools meaning the full benefit of annual investment allowances are not fully utilised and identification of expenditure attributable to each individual property is not easily identifiable.   

How we Help:

  • We maintain all the different capital allowances pools and track expenditure going in and out each year.
  • We link qualifying expenditure across different pools by property.
  • We reconcile new additions against total capex records to identify any gaps.
  • We allocate the annual investment allowance in the most advantageous way.
  • We calculate any balancing allowances or balancing charges.
  • We provide the business’s accountant with an annual summary to feed into the tax return.

Benefit to the Client:

  • Reassured: that all potential allowances are claimed and details available on request.
  • Empowered: with information to make strategic decisions at the point of disposal.
  • Improved cash flow: tax relief position optimised.

Why use TFI Group?

+ Corporate Acquisition Due Diligence

Corporate Acquisition Due Diligence

The Issue: Corporate acquisitions often contain property, land or trading stock.  The full amount of tax relief is rarely claimed meaning there is often scope to add value for the new shareholders post acquisition.   

How we Help:

  • We form part of the due diligence team to do a targeted piece of work looking specifically at the latent value of unclaimed tax incentives.
  • We review the capital allowances claims (and land remediation relief claims) made by the company.
  • We reconcile the claimed tax incentives against the property, development and land holdings.
  • We summarise the risks and opportunities relating to that part of the acquisition.
  • We provide estimates of the latent value inherent in the acquisition.

Benefit to the Client:

  • Reassured: you will know the detail of what you are buying.
  • Empowered: with information to negotiate a better deal.
  • Improved cash flow: opportunities for tax rebates and tax planning opportunities realised.

Why use TFI Group?

+ Negotiation with HMRC

Negotiation with HMRC

The Issue:  A tax inspector typically has two years after the year end in which a claim has been made to raise an enquiry into a claim.  This can come in the form of eligibility or entitlement challenges from the tax inspector or from the Valuation Office / District Valuer on costs and land values respectively. 

How we Help:

  • We enter into correspondence with HMRC authorities either direct or through your accountant as instructed.
  • We construct legal arguments as necessary with reference to case law, legislation and HMRC’s own guidance notes.
  • We support any costs with reference to source pricing documents, our own database of costs or from industry recognised pricing sources such as Spons.
  • We keep our clients advised throughout the process and make recommendations as necessary to ensure a speedy conclusion to the enquiry.

Benefit to the Client:

  • Protected: against any unjustified reductions in claim values.
  • Improved cash position: reduced tax relief leakage.

Why use TFI Group?

+ Training

Training

The Issue: Successful claims often rely on a small amount of participation from a large range of people.  However, these people are rarely aligned, misconceptions and confusion abound and businesses rarely have the specialist knowledge to navigate their way through increasingly complex tax legislation.

How we Help:

  • We listen to understand what the key training requirements are.
  • We provide training for tax teams to help highlight the key tax planning opportunities.
  • We provide training for commercial and technical teams so they can procure in a more tax intelligent way.
  • We provide training for land buyers so they can ask the right questions.
  • We help bridge the gap between the various departments so everyone works towards a common goal.

Benefit to the Client:

  • Empowered: with the correct information to make better and more timely decisions.
  • Improved cash flow: ability to secure the best outcome throughout the project lifecycle.
  • Protected: against the possibility of delay due to incomplete information.

Why use TFI Group?

Leasholder-tenant-wheel