Tax relief for commercial property embedded fixtures and fittings

Capital Allowances for Property Embedded Features, Fixtures and Fittings


Your Accountant should have included a tax reducing Capital Allowance claim for your business property, plant and machinery; but often does not claim for embedded fixtures and fittings.

These can represent an additional tax reducing allowance of up to 40% of the property value, thus significantly reducing your Corporation or Personal Tax.  It particularly benefits higher rate tax payers.

Typical businesses and properties are, for example:

Offices, warehouses, hotels, leisure attractions, holiday parks, furnished holiday lettings, care homes, privately owned functional buildings (concert halls, sports centres, student accommodation…)

As a general rule, the more offices or rooms in the premises, the bigger the potential claim.

Accountants will often say that they have claimed Capital Allowances in your tax return but they may not be familiar with the more specialist area of Embedded Fixtures and Fittings. An effective way of checking whether your Accountant has claimed is to ask the question “Have you sent in a surveyor to assess the Embedded fixtures and fittings value of my property?” If the answer is NO, then they probably have not assessed these and claimed for you.

Embedded fixtures and fittings are functional items that are simply put, embedded into the building. They can include items such as heating, air conditioning, hot and cold water systems, electrical and lighting systems – the list is quite extensive and recognising these requires a detailed knowledge of the legislation. A qualified Surveyor, experienced in this area, will be able to value what can be included and the Surveyor’s report is part of the justification for HMRC.

The property must be either owned by you or by your business and you must be paying personal or corporation tax.  Capital Allowance opportunities may exist for entities (individuals, partnerships, companies) that Buy and/or Improve Property, and they may exist even if the accountant has already claimed capital allowances on some expenditure.

You cannot claim if the property owner is not liable for tax. (Trusts, pension schemes and other entities not liable for tax, are examples where a claim is not possible.)

Claiming for property embedded fixtures and fittings is a specialist area and requires an assessment of your business or ongoing personal tax position, depending on who owns the property, and whether the claim is within the period allowed by HMRC of typically two years from the purchase date of the property. It is also contingent on whether a claim has previously been made for the property. If a property was acquired before April 2014, then  there is no time bar on a claim being made.

If you lease a commercial property and have made modifications to it, property embedded PEFFs in these extensions or alterations can also be claimed. There is no time limit for these.

A Surveyor must visit and confirm what qualifies in your property. The survey report is part of the evidence necessary when making a claim. The value of your claimed allowance is then calculated and submitted to HMRC.

Our team at CA Advisory Services undertakes the entire process for you by:

  • reviewing your current and ongoing tax position, working closely with your Accountant
  • confirming the ownership of the property and the purchase transaction date, working with your Solicitor
  • checking for any previous claim that may have been associated with the property
  • sending in our Surveyor to assess the claim value
  • gathering the evidence and preparing the claim justification
  • calculating the annual reduction, as defined by HMRC

We then prepare the report and submit the claim to HMRC, generating for you or your business a significant Personal or Corporation Tax reduction benefit.