By Stephanie Stock, Accountant at Hive Business

There are different categories of tax allowances available to businesses who invest in tangible assets that will be used on an ongoing basis in a business.

Did you know you can claim tax allowances on certain parts of a commercial building you have purchased?

You may have purchased your commercial building some years ago when the tax legislation at that time did not allow you to make a claim on any part of a building purchase, however, in 2008 tax legislation was introduced which allows you to make a claim retrospectively. There are many businesses out there that are unaware of this and so are missing out on sometimes huge amounts of tax savings available.

HMRC introduced legislation in 2014 to attempt to minimise these large backdated claims. The legislation now details that in order to make a claim the purchaser and vendor must both make an election at the time of the sale detailing the amount of the claim to be made. It is at this time that many people will lose out if they don’t seek tax advice alongside their legal advice. The claim is often filled in with a standard amount, say £1, which will negate the purchaser from going and making a backdated claim, this can be a huge cost, that although is not payable by the business, it is a cost of lost potential tax savings.

Upon the sale of a business, you could also lose out. If the purchaser comes to you to ask you for an election with a fairly high figure, many people would blindly sign this as they don’t understand the consequences. After all, it’s not costing them any more money… except in lost tax savings!

This is a very complex area and needs specialist advice. The best thing you can do is let your tax advisor know as early as possible if you are planning on buying or selling a building.

If you are thinking of buying or selling a dental practice, we can help. Call 01872 300232 or email us at hello@hivebusiness.co.uk.