Warehouse operators missing out on tax benefits

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Warehouse operators have been warned that they could lose out on millions of pounds in unclaimed capital allowances as a result of changes to the tax regime which will come into effect in April next year.

Neil Tipping, senior tax consultant at CCH, Wolters Kluwer’s global tax and accounting business, said: “It is no exaggeration to say that the vast majority of properties, including depot, storage and distribution facilities, have embedded fixtures for which their owners and accountants have never claimed tax relief.

“It may sound too good to be true, but our experience working with a range of businesses, and their financial and legal advisers, confirms the extent of the dormant tax benefit nestling in ‘integral features’ of buildings.”

Changes in the Finance Act that come into effect in April 2014, and a tougher line by HMRC under new rules that apply when properties change hands, mean that tax allowances for fixtures in commercial buildings could be lost to a new buyer and all future owners. And that could have an impact on the value of the building.

Embedded assets include: electrical and cold water systems, air conditioning, radiators, partitioning and external solar shading. Unless a company has already had its buildings and books reviewed by specialist surveyors and tax experts there are almost certainly unclaimed allowances available.

“In our experience these unclaimed allowances are typically worth up to ten per cent of historical expenditure on premises in the logistics sector,” said Tipping.

“Where warehouses have sophisticated security systems, for example, or there are attached offices, the value can be much higher. We have so far discovered millions of pounds of quantifiable expenditure.

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