Capital Allowances

We recently completed a €1.5m extension and refurbishment to our workshop and offices.

A friend who is a quantity surveyor, mentioned that if we analysised or costs we could maximise our Capital Allowances. Our Accountant seems to think it is not worth analysing/separating our costs and would rather apply the depreciation (I think) to the whole of the costs over a long period.

The surveyor was indirectly involved with a detailed cost analysis of a much larger project - which gave very worth while tax savings (if saving is the right word) to the developer/client.

Questions are
1. Who provides these services outside of the large accountancy practices.
2. Is this worth pursuing given the overall value of our project i.e € 1.5m.

Thanks in advance

You cannot claim a tax decution for depreciation (as per the accounts) but may instead claim capital allowances on certain allowable expenditure, which is effectively the same thing but different rules apply for allowability. There are two types of capital allowances which may be relevant - one on industrial buildings and one on plant and machinery. Different tax rules and amortisation periods apply for each.

It is definitely worth looking to identify costs arising in each category and claiming the allowances you're entitled to in respect of the extension / refurbishment. Based on a workshop type of business, I would also suspect that capital allowances should be an ongoing type of claim in your tax returns.

The company carrying out the extension and the refurbishment should be able to provide you with a listing of the assets acquired by the company, as should the accountant who will need to categorise these as asset "additions" for your accounts.

Two suggestions:

1. Price around to get a fixed price quote for the work involved in establishing the allowable claim (taking into account the reputation of the advisers). Although it will cost something, the tax savings should more than compensate.

2. Your accountant clearly isn't up-to-date with tax law, which is a broader issue for you to consider.

Thanks for your reply.

One more question - is there a time limit to claim these tax allowances.