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3 Mistakes to Avoid When Making an Embedded Capital Allowance Claim


3 Mistakes to Avoid When Making an Embedded Capital Allowance Claim

When it comes to making an embedded capital allowance claim, there are a few common mistakes that commercial property owners often make. By avoiding these mistakes, you can ensure that your claim is successful and that you maximize the potential benefits.

1. Not knowing what qualifies for a deduction

One of the most common mistakes commercial property owners make when it comes to an embedded capital allowance claim is not knowing what actually qualifies for a deduction. In order to be eligible for a deduction, the capital improvement must meet certain criteria. It must be for the sole purpose of business, it must be permanently affixed to the property, and it must be new when it is installed.

2. Failing to keep adequate records

Another mistake commercial property owners often make is failing to keep adequate records. In order to substantiate your claim, you will need to have documentation such as receipts, invoices, and quotes for the capital improvements that you are claiming. Without this documentation, it will be very difficult to prove your claim and you may miss out on potential deductions.

3. Missing the deadline for making a claim

Finally, another common mistake is missing the deadline for making a claim. In order to claim a deduction in the year that the capital improvement was made, you must file your claim by the end of the financial year. If you miss this deadline, you will have to wait until the following financial year to claim your deduction.

By avoiding these common mistakes, you can ensure that your embedded capital allowance claim is successful and that you maximize the potential benefits.

Conclusion

If you are a commercial property owner, it is important to be aware of the potential deductions available to you. An embedded capital allowance claim can be a great way to reduce your taxable income and increase your cash flow. However, there are a few common mistakes that property owners often make when making a claim. By avoiding these mistakes, you can ensure that your claim is successful and that you maximize the potential benefits.

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Property Tax Refund Centre are specialists in identifying items in your Commercial Property that qualify for Capital Allowances. We survey your property, see what you can claim for, and manage the claim. We do it all on a No Win-No fee basis. There is no risk for you.


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