The vast majority of surveyors believe that charges levied against empty commercial properties are ‘significantly detrimental’ to the recovery of the nation’s local economies, a report from the Royal Institution of Chartered Surveyors (RICS) found.

The new survey from RICS found that 90 per cent of surveyors claimed that extortionate Empty Property Rates (EPR) are hampering local economic recovery in the UK.

75 per cent of those who responded also believed that the rental value of retail properties would decrease as a direct result of EPR.

Nine tenths (88 per cent) also considered EPR to be a significant deterrent for the speculative building of commercial property.

Jonathan Cornes, Building Surveyor from Jonathan Cornes Associates said: “The charges faced by property owners are quite simply crippling the high street and preventing businesses of all types from achieving financial stability. It is clear that in this difficult economic climate, businesses need all the help they can get.

“We would like to see the government take the initiative in the forthcoming Autumn Statement and offer property owners a longer exemption period. This would allow commercial landlords some much needed breathing space and contribute towards getting the business sector moving again”.

Owners of commercial premises, including both offices and high street shops, are not required to pay business tax for three months after they are vacated. This period is extended to six months for warehouses and other industrial properties.

However, beyond this period, EPR are applicable at a full rate, leaving many businesses with a hefty tax bill which they cannot fund.

68 per cent of respondents also claimed that commercial property floor space was vacant for periods in excess of six months, meaning that owners face unmanageable taxes when their businesses are at their most stretched.

Over half of those surveyed said that they believe such factors can lead to property owners demolishing their business premises rather than face the tax.

Rates collected from taxpayers are initially passed to central Government before being redistributed back to Local Authorities as part of the Local Government Finance Settlement. These funds are then used towards paying for local services.

RICS has called for the Government to extend the exemption period for commercial property owners in its forthcoming Autumn Statement, allowing premises owners without tenants to avoid EPR for six, rather than three, months.

It has also asked for industrial property owners to be granted an extended 12 month grace period.

Property Aspects Magazine appreciates the expertise and advice from Jonathan Cornes in the compilation of this article

As a high rate taxpayer, do you know if you’ve claimed all the reliefs to which you are entitled?.

HM Revenue & Customs has sent out letters to thousands of people, liable to pay tax at rates of 40% or above as part of a campaign to urge people to contact the HMRC voluntarily. Those who took up the opportunity, launched on July 3, will receive better terms and any penalty they pay will be lower than if the HMRC was to come to them first.

The Revenue’s attitude is more lenient nowadays. More likely will they say ‘If you cannot afford to pay what you owe all at once, don’t worry. If your circumstances warrant it, you will be able to spread the payments’.

Are you a higher rate tax payer who could benefit from more efficient tax planning?

Manchester-based, Conation Capital has helped thousands of UK businesses reclaim cash through tax incentives and wiser investment choices.

Taking advantage of capital allowances, Conation Capital has helped companies claim back tax relief on fittings such as air conditioning, radiators, pipe work, cabling, lighting and security systems on their commercial properties – even if they were bought a decade ago.

Ross Wyllie, senior partner at Conation Capital, said: “At least 96% of commercial property owners are likely to be sitting on 20% in unused tax relief. If a limited company buys a commercial building for a million pounds, around 20% of the purchase price can be off-set against their annual tax bill. If as a business you have a chance of recovering some of your tax expenditure, surely you would consider it – but the truth is many businesses don’t know this exists.

“We tell people what they don’t know. Sometimes they think it’s too good to be true but we concentrate on low risk tax relief schemes which the Government approves of including incentives such as capital allowances. There are a number of Government approved avenues out there which help reduce corporation tax because they encourage economic growth”.

We appreciate the expertise provided to Property Aspects Magazine from the team at Conation Capital.

You can contact them on 030000 339900

Business rates demands are an often forgotten element of the cost of property ownership and there are many examples of business’ that have run into financial difficulty complaining that the high charges were a factor in their business failure.

Your business rates are calculated by the Valuation Office Agency (VOA) and are collected by your local authority. The calculation is based on your property rental value and the use to which your property is made (or can be made).

The last revaluation for calculating your rates was carried out in April 2010 and since then many business organisations have seen an increase in the demands being raised.

You should check the calculation made on your business is correct as there are areas from which you can appeal for a reduction or relief from these charges. Here are 6 quick steps that could see your charges drop;

1 The Government introduced a temporary increase for businesses eligible for Small Business Rates Relief (SBRR). Check your eligibility.

2 Mandatory reliefs is available to registered charities and to Community Amateur Sports clubs. Do you qualify?

3 Discretionary relief is available to non-profit making organizations and this is judged on set policy guidelines. If you think you qualify then approach the VOA.

4 Is your property empty or unoccupied, have you claimed relief from payment (3 months for offices and a further 3 months for industrial units)?

5 Has there been a negative impact on your trade due to vacant commercial properties in the local area, or major works such as road digging that has reduced customers accessing your business?

6 Do you still use the premises in the same way as you did when the revaluation took place, is there a new layout or alterations? These could affect the way the property is valued.

Peter Knight,from Manchester-based property management company Knight Site Solutions, said: “Business rates are one of the biggest outgoings for many businesses but many small firms are still paying over the odds when they could be benefitting from the Government’s business rates relief scheme.

“If your business has a multi-property portfolio and doesn’t qualify for the relief we can still help. Our professional rating surveyors can assess your commercial property to ensure your current rates are accurate and fair and will even negotiate with the Valuation Office on your behalf to try to reduce them if potential savings are identified. In the current economic climate, this saving could be well received”.

If you are thinking of appealing to the VOA then ensure that you have good records such as dates and photos as evidence to support your case. The rewards can be significant and you should consider seeking specialist advice from an RICS chartered surveying practice.

Further information is available from; Valuation Office Agency www.voa.gov.uk Your local authority will have leaflets such as Summary Valuations (V07132)

Property Aspects magazine thanks Peter Knight at Knight Site Solutions for his assistance in publishing this article.

Ross Wyllie, Managing Director of Conation Capital, explains how owners of commercial property are sitting on unclaimed capital allowances.

The net effect of the current weak economic climate is that UK companies are under the cosh. Credit is hard to come, cash flow is under pressure and money is tight.

But for companies that own commercial property, there is some good news. In the vast majority of cases, they will be owed a cash windfall from the Revenue as a result of unused capital allowances. According to a top accountancy firm, over nine in 10 owners of UK commercial property will be in line for a rebate from HMRC due to unused capital allowances tax relief.

Because this tax relief can be attributed to buildings of any age, we estimate that there is some £65bn–£70bn of net tax rebate lying unclaimed in the UK’s commercial property stock. To date, thousands of commercial property owners have made successful claims, with the average claim approximately £140,000 and the biggest worth tens of millions.

What are capital allowances?

If you’re not that familiar with capital allowances, they’re a tax relief available to anyone incurring capital expenditure buying, building or making adjustments to commercial property. They’re a hugely valuable relief but so little is known about them.

Understandably, the Revenue isn’t overly keen to raise awareness of them so that’s one big problem. But the more fundamental problem is that identifying capital allowances within commercial properties can be very difficult — so difficult in fact that even accountants don’t understand it.

Whereas accountants will claim on more obvious items such as shutters and curtains, fire extinguishers and carpets when a client buys a commercial property, generally they will not uncover the items where the far more significant costs to a business lie. These might include air conditioning or heating systems, lighting and security systems, plant and machinery items.

Even if they did uncover the more ‘valuable’ items, the issue for accountants is that they will not have receipts for all the potentially qualifying assets within that property. Therefore they are not in a position to progress it any further.

Specialist capital allowances firms like Conation Capital, use thousands of clever matrix’s to work out the purchase price of items in a building in a particular area in a particular year. In effect, they carry out a forensic audit of a building and identify items that qualify for capital allowances as laid down in the Capital Allowances Act 2001.

It’s not pretty, but it can be very positive financially for the client in question.

Property Aspects Magazine would like to thank Ross Wyllie at Conation Capital for his contribution to this article.

A Chartered Building Surveyor is warning that this is the last chance for alterations to listed buildings before zero VAT rate is withdrawn.

It was announced in the budget in March that the zero-rate of VAT will be withdrawn for “approved alterations” to listed buildings from the October 1.

Stuart Thornhill of Jonathan Cornes Associates said: “There are some transitional arrangements in place, but essentially this is now the last opportunity to have the work done at the zero-rate of VAT.

“To comply with the current rules the building must be used for residential or charitable purposes, the work must be an alteration not a repair, and the work must require and receive listed building consent. “With the standard consultation period for listed building consent lasting eight weeks an application made today would, if approved, receive listed building consent in the middle of September which would only leave two weeks for the work to be carried out and invoiced before the October 1 deadline”.

The anti-forestalling measures that have been put in place mean that the work must be completed and invoiced before the relevant date.

Any outstanding work after this date will be charged at the standard rate of VAT. After October 1 all work to listed buildings will be subject to the standard rate of VAT which is currently 20 per cent.

Many heritage organisations are lobbying Government against VAT changes to listed buildings. They have been successful in securing an amendment to the transitional amendments which now confirms that as long as the Listed Building Consent was applied for before Budget Day on March 21 the zero-rating will remain available until September 30, 2015.

Property Aspects Magazine appreciate the contribution to this article from the team at Jonathan Cornes Associates, Chartered Building Surveyors. Contact them on 01782 209203

British businesses could save billions of pounds if they claimed full tax relief on the commercial properties they own, according to experts.

Taking advantage of capital allowances, companies can claim tax relief on fittings such as air conditioning, radiators, pipework, cabling, lighting and security systems – anything relating to the intrinsic fabric of the building – even if the property was bought a decade ago, according to Tony Smith, CEO at Conation Capital.

But while accountants routinely claim on everyday purchases such as curtains, carpets, fire extinguishers and radiator covers, they often fail to claim on other, less-easy-to-spot fittings.

Conation Capital advises that without receipts, a detailed analysis is needed to ascertain the correct value of the qualifying assets within the property. Also, companies can only claim for an item once and need to check that a claim has not been made before. Conation Capital conducts forensic surveys to draw up a list of all the fittings in every room, including hidden cabling, and then feed it into a computer model.

Smith said “The sheer scale of legislation” to battle with, was putting many smaller firms off. “In most cases, a business doesn’t claim as much as they could claim, and there are still many businesses who don’t claim at all … it could be billions of pounds”.

There are about 1.4m commercial properties in England and Wales, according to government figures, ranging from fish and chip shops to the Gherkin. On a typical £1m property, a Capital Allowance specialist would typically find £200,000 of unused capital allowances. As for a typical SME with a commercial property, it could save about £25,000.

Capital allowances on commercial property have always been a bit of a “dirty secret” since being introduced in the UK after the Second World War. The government had considered getting rid of them altogether, but agreed to the new rules after industry lobbying, amid fears that companies might relocate to other places with capital allowances, such as the US, France, Germany or eastern Europe.

If you need help to calculate whether you could qualify for a property tax rebate, contact Conation Capital directly on 03000 30 99 00

Property Aspects appreciates the contribution to this article from the team at Conation Capital.

You may still be able to take advantage of little known legislation to claim a tax allowance on the integral features within your property.

This could be worth thousands of pounds to you.

But you need to investigate this now as the legislation may be about to change and the tax paid would be lost forever.

The rules on Capital Allowance – integral features were introduced in April 2008. They are classed within the Capital Allowances Act 2001 (CAA01) as Plant & Machinery (P&M) and as such, attract capital allowances.

Ross Wyllie, Managing Director of Conation Capital said; “Claiming Capital Allowances can be overwhelming for any business, it is a complex legislation. Knowing what the integral features of your business will go some way in helping you understand your claim”.

The introduction of integral features was part of a wider package of Business Tax reforms, introduced by Finance Act 2008. It included changes intended to simplify and reduce the distortive impact of capital allowances. In order to write down the cost of features that are normally integral to a modern building (such as electrical, cold and hot water systems etc), which have a longer average economic life than other plant & machinery, at a more appropriate rate, a new pool was introduced for these integral features which would attract writing down allowances at a ‘special rate’ of 10% per annum.

The assets which are now classed as integral features are:

* Electrical systems (including lighting systems)

* Cold water systems

* Space or water heating systems, powered systems of ventilation, air cooling or air purification, and any floor or ceiling comprised in such systems

* Lifts, escalators and moving walkways

* External solar shading

The rules also specifically clarify that the new definition does not extend to any asset whose principal purpose is to insulate or enclose the interior of a building, or to provide interior walls, floors or ceilings which are intended to remain permanently in place (S23(4) & S33A(6)). So if, for example, a business installs a new, permanent false ceiling in its premises, in order to conceal new wiring and service pipes, expenditure on that ceiling would not qualify for P&M allowances.

On the other hand, if a business installs in its premises a plenum floor or plenum ceiling, the principal purpose of which is to function as an integral part of the heating or air conditioning system (for example, the plenum floor or plenum ceiling may form the fourth side of a duct or channel through which stale air is extracted and treated air is discharged), that expenditure would qualify for PMAs as part of an ‘integral feature’ of the building or structure (CA22070 & CA22080).

Ross Wyllie continued: “When undertaking a claim for capital allowances it is therefore important to determine when expenditure was incurred in order to determine whether they qualify as being “integral features” and should therefore be allocated to the “special rate pool”. Or alternatively, whether the expenditure was incurred before April 2008 and may therefore qualify for the “main pool” where the WDAs were 20% p.a. (reduced to 18% as from April 2012)

The capital allowances legislation was changed in an effort to help define more closely those features which do qualify for allowances CAA01 does not contain a definitive list of items which qualify as P&M”.

If you need further confirmation as to whether you qualify for any property-related tax rebate, please contact the experts at Conation Capital on 03000 309900 or info@conationcapital.com

Hundreds of thousands of small business owners could be due a sizeable tax rebate from HMRC.

More and more commercial property owners have become aware of the tax advantages of making a capital allowances claim. A capital allowances claim may be made whether the commercial property is owned as an individual, partnership or company. Capital allowances protect profits from corporation or income tax. Any company that owns a commercial building has a high probability of receiving a capital allowances tax windfall to the tune of maybe thousands of pounds.

Capital allowances are one of the more obscure areas of tax and for this reason they often pass under the radar of a lot of firms. For obvious reasons, the Revenue isn’t shouting about it from the rooftops, either.

To date, the average rebate generated for smaller UK commercial property owners is £25,000 net and the biggest tax rebate more than £10m net.

Ross Wyllie, Managing Director of Conation Capital Said: “Businesses of all types could be eligible — from fish and chip shop owners, dry cleaners and dentists to grocery stores and estate agents. Research confirms that in nine cases out of ten, capital allowances reports will uncover a tax rebate for the owner of a commercial property”.

“There are still tens of thousands of commercial property who have not made a claim for capital allowances because they have never been made aware that they can”.

Ross continued: “When one is presented by a tax saving initiative it is natural to want to know whether what is being proposed is legal. The answer to this, for capital allowances claims is a definite yes. Capital allowances legislation dates back to the 1870’s but the current legislation is The Capital Allowances Act 2001 which is usually amended annually by the Government of the time. Therefore capital allowances are a tax relief enshrined in statute”.

“Capital Allowances can be claimed on any expenditure which brings into existence (or improves) an asset with an enduring benefit for the trade. The purpose of capital allowances is to protect the owner’s profits from taxation and therefore reduce their tax bill. If the property has been owned for more than one financial year then a tax rebate may well be due and less tax will be paid for many years to come.

Property Aspects Magazine appreciates the expert contribution to this article from Capital Allowance consultants, Conation Capital.