Industrial Unit

A client had acquired an industrial unit for use in their business in 2010 with a purchase value of £725,000. Over the years since acquisition, they had incurred a further £375,000 of expenditure installing two separate mezzanine floors, extending the office space, and upgrading the building electrical systems.

Following due diligence, we established that the unit had been constructed in 1998 by the Regional Development Agency (a Government regeneration quango). It had then been acquired by an owner occupier into their business in 1999 but shortly thereafter transferred into their pension fund.

Having traced and contacted the prior owners, we were able to establish that no CAs had been claimed whilst the property sat within a taxable entity.

We were able to secure £159,000 of CAs in relation to the original purchase (restricted slightly due to some of the original electrical installations having been since replaced).

We worked with the client’s accountant to analyse the property expenditure to find items that had been overlooked. We were able to identify further CAs including:

• £96,000 eligible mezzanine floor
• £8,000 of building work in connection with the electrical upgrade works (the accountant had diligently claimed the cost of much of the electrical supply cost already)
• £12,000 in relation to the installation of office space including demountable partitions and specialist flooring
• £26,000 in relation to professional fees and contractors’ preliminaries that had not been allocated to the works undertaken

Costs for the electrical supply, carpets, blinds and shower installation had already been claimed by the accountant.

As we were able to amend two years of tax records, the client was able to secure a significant cash repayment with the balance of allowances available to offset future profits.