Office fit-out

A client had leased a shell and core office space in a new development with a fit-out planned, costing £350,000. We were introduced to the client by the agents, who had helped them secure the office. We were appointed part way through the fit-out tender process.

We were able to review the design proposals, and, during the value engineering process, we were able to suggest changes that increased the availability of capital allowances (CAs).

We identified £286,000 of expenditure qualifying for CAs and a further £52,000 of expenditure qualifying for the structures and building allowance (SBAs). By using their annual investment allowance (AIA), the client was able to use the tax relief to offset taxable profits in the current year, saving the business £54,640 in cash in the first year.

We were able to assist them further in retaining the unclaimed CAs from the property they were vacating.

In this instance, we were able to add significant value by offering design suggestions which would generate a greater tax benefit.

Where we do not have any input in the design phase on a fit-out project, we would typically expect to identify CAs of anywhere between 55%-85% of the total expenditure. However, as demonstrated, where we are contracted during the design phase the allowances are almost certainly higher and could mean that up to 95% qualifies for CAs.