AA01 Change of accounting reference date

AA02 Dormant Company Accounts

AA06 Give notice of statement of guarantee by subsidiary company

AD01 Change of registered office address

AD02 Notification of single alternative inspection location (SAIL)

AD03 Change of location of the company records to the single alternative inspection location (SAIL)

AD04 Change of location of the company records to the registered office

AP01 Appointment of director

AP02 Appointment of corporate director

AP03 Appointment of secretary

AP04 Appointment of corporate secretary

TM01 Termination of appointment of director

TM02 Termination of appointment of secretary

CH01 Change of director's details

CH02 Change of corporate director's details

CH03 Change of secretary's details

CH04 Change of corporate secretary's details

CS01 Confirmation statement

DS01 Striking off application by a company

DS02 Withdrawal of striking off application by a company

IN01 Application to register a company

MG01- Overseas Particulars of a mortgage or charge

MG02 – Overseas Statement of satisfaction in full or in part of mortgage or charge

MG04 overseas Application for registration of a memorandum of satisfaction that part (or the whole) of the property charged (a) has been released from the charge; (b) no longer forms part of the company's property

MR01 Particulars of a charge

MR02 Particulars of a charge subject to which property or undertaking has been acquired

MR03 Particulars for the registration of a charge to secure a series of debentures

MR04 Statement of satisfaction in full or in part of a charge

MR05 Statement that part or the whole of the property charged (a) has been released from the charge (b) no longer forms part of the company’s property or undertaking

MR06 Statement of company acting as a trustee

MR07 Particulars of alteration of a charge (particulars of a negative pledge)

MR08 Particulars of a charge where there is no instrument

MR09 Particulars of a charge subject to which property or undertaking has been acquired where there is no instrument

MR10 Particulars for the registration of a charge to secure a series of debentures where there is no instrument

NM01 Notice of change of name by resolution

PSC01 Give notice of individual person with significant control

PSC02 Give notice of relevant legal entity with significant control

PSC03 Give notice of other registrable person with significant control

PSC04 Give notice of change of details for person with significant control

PSC05 Give notice of change of details for relevant legal entity with significant control

PSC06 Give notice of change of details of other registrable person with significant control

PSC07 Give notice of ceasing to be a person with significant control

PSC08 Give notice of PSC statements

PSC09 Give notice of update to PSC statements

Res CA2006 Special resolution on change of name

Written Res CA2006 Written special resolution on change of name

SR01 Apply to remove your home address from the public register

SH01 Return of allotment of shares

 

Disclaimer

In preparing and maintaining this section of our website every effort has been made to ensure the content is up to date and accurate. However, the law and regulations change continually, and unintentional errors can occur, and the information may be neither up to date nor accurate. We make no representation or warranty (including liability towards third parties), express or implied, as to the accuracy, reliability or completeness of the information on the website. Please don’t act directly on anything you read - contact us first for advice on how it may affect your individual circumstances.

 Disclaimer

In preparing and maintaining this section of our website every effort has been made to ensure the content is up to date and accurate. However, the law and regulations change continually and unintentional errors can occur and the information may be neither up to date nor accurate. We make no representation or warranty (including liability towards third parties), express or implied, as to the accuracy, reliability or completeness of the information on the websi

A brief history

CGT was first introduced in 1965. Until then capital gains were not subject to tax. This had led many people to avoid Income Tax by converting (taxable) income into (tax free) capital gains. A capital gain is the profit you make when you sell an asset for more than you paid for it and the law sometimes taxes you on capital gains that you are deemed to have made when you give certain assets away or otherwise dispose of them without selling them.

At various times in the past the Capital Gains Tax system has provided major reliefs which have also complicated the system. Taper relief, indexation or inflation linked reliefs are no longer available, although gains attributable to periods of ownership prior to 31 March 1982 are exempt from CGT.

What is CGT?

CGT is a tax on the profit you make from selling certain assets such as property, shares or other investments e.g. antiques and fine art.

A charge to CGT usually arises after you sell an asset but can also occur when you:

  • give away a chargeable asset;
  • transfer a chargeable asset to another person;
  • exchange a chargeable asset for something else; or
  • receive compensation for the loss or destruction of an asset, e.g. an insurance payout.

At its simplest, a capital gain is calculated by deducting from the sale proceeds of an asset:

  • what you originally paid for it (or its market value at the date you inherited it or when it was given to you);
  • any costs you incurred when you bought it (e.g.: solicitors fees for buying a property);
  • any costs you incurred enhancing or improving it; and
  • any costs you incurred when selling it (e.g.: commission to a sales agent or auction house).

CGT Rates

Everyone is allowed to make a certain amount of tax free capital gains each year. This ‘annual exempt amount’ is currently £12,300 for individuals and £6,150 for trusts.

CGT is charged at a simple flat rate of 20% (2021-22: 20%) and this applies to most chargeable gains made by individuals. If taxpayers only pay basic rate tax and make a small capital gain they may only be subject to a reduced rate of 10% (2021-22: 10%). Once the total of taxable income and gains exceed the higher rate threshold, the excess will be subject to 20% CGT.

An 8% surcharge applies to the sale of chargeable residential property (apart from a principal private residence) and carried interest (the share of profits or gains that is paid to asset managers).

A lower rate of 10% applies to capital gains that qualify for entrepreneurs’ relief (ER) or investors’ relief (IR). Limited companies do not pay CGT. Instead they pay Corporation Tax on their chargeable gains which qualify for fewer reliefs and exemptions than those available to individual taxpayers.

Payment of CGT

CGT is usually due for payment on 31 January following the end of the tax year.  For example, for the tax year ending 5 April 2022, any CGT due must be paid by 31 January 2023 in order to avoid penalties and interest.

CGT on sale of residential property

A payment on account of any CGT due on the chargeable disposals of a residential property needs to be made within 60 days (30 days prior to 27 October 2021) of the completion of the transaction. This requirement does not apply if the property sold is fully covered by Private Residence Relief as the sale will not be liable to CGT.

Notifying HMRC of liability to CGT

If you are required to complete a Self Assessment tax return, you are required to notify HMRC of any taxable gains on the capital gains pages of the return.

As with Income Tax you are required to calculate your liability to CGT even though this requires an understanding of the rules, the exemptions and the available reliefs.

If you do not automatically receive a tax return each year you must still notify HMRC that you have a CGT liability. Tax geared penalties and interest are charged when CGT is paid late.

The law requires you to notify HMRC by 5 October following the end of the relevant tax year. HMRC will then issue a tax return and this must be completed within 3 months and any tax paid by the same deadline.

You are only required to report capital gains as and when you have a liability to pay CGT.  In most cases therefore no return is required where total gains in a tax year are less than the annual tax-free allowance. Of course someone needs to prepare the calculations to establish whether there is a liability to CGT.

Losses

Sometimes you may sell an asset for less than paid for it. In such circumstances you would make a capital loss. You can typically deduct capital losses from capital gains made in the same or future years.  As a general rule, if the asset would have been liable to CGT had a gain taken place then the loss should be an allowable deduction.

If you own shares or other assets that become worthless you can make a ‘negligible value claim’. This procedure allows you to establish a capital loss even though you are still the legal owner of the ‘asset’. Such losses can be deducted from other capital gains as noted above.

Main home exemption from CGT

Most people are aware that they do not have to pay CGT when they sell their principle private residence. The exemption does contain some restrictions however, if, for example:

  • the house was not used only as a main residence throughout the period of ownership;
  • the garden or grounds, including the site of the house are greater than 5,000 square metres;
  • part of the home was ever used exclusively for business purposes;
  • all or part of the home has been rented out;
  • the main reason the home was purchased was to make a profit from a quick sale;
  • the owners have moved to another home before selling the old one;
  • the occupiers are married or are in a civil partnership and own more than one main residence at a time.

In many of these situations it will be necessary to apportion the capital gain to identify how much qualifies for the main residence exemption. And further exemptions may be available to relieve any part of the gain that is not automatically exempt.

For example, in most cases the final 9 months (2021-22: 9 months) of ownership will be treated as if occupied by the home owner even if they have moved to live elsewhere. There are also special rules where the owner was not living in the house due to a requirement to live elsewhere for work related reasons. The time limit is extended to 36 months under certain limited circumstances. For example, if the owner of a property lives in a care home or has certain disabilities.

Contrary to a popular myth, if you work from home you will not automatically affect your entitlement to the main residence exemption. The important issue is to ensure that you do not identify any specific room or area in the house as being used exclusively for business reasons. Occasionally this is unavoidable where your business requires the conversion of a room into something like a surgery, clinic or studio that is used exclusively for business purposes. In such cases, when the house is sold, it will be necessary to compute how much of any capital gain relates to the room or area used exclusively for business purposes.

When an individual, married couple or those in a civil partnership own more than one home, they can make a formal election as to which one should (in due course) benefit from the main residence exemption. You need to make this election within two years of having more than one home. You are also allowed to change your mind, or vary the election, within two years of acquiring another home.

Main home lettings relief from CGT

Home owners who let out all or part of their house may not benefit from the full main residence relief but can benefit from lettings relief. The maximum amount of this relief will be the lower of:

  • £40,000;
  • the amount of main residence relief due;
  • the amount of gain you've made on the let part of the property

Since 6 April 2020, home owners can only qualify for this relief if they are in shared occupancy with the tenant.

Non-UK residents and capital gains tax 

There is a CGT charge on the sale of UK residential property by non-UK residents. Only the amount of the overall gain relating to the period after 5 April 2015 is chargeable to tax. Private residence relief where a property is the owner’s only or main residence will apply under certain circumstances.

The amount can be calculated by either:

  • establishing the value of the property as of 5 April 2015 (known as ‘rebasing’) and then calculating the amount of gain over that value in the normal way;
  • apportioning the whole gain on the basis of the time you held the property after 5 April compared to the total time the property has been owned.

Anyone that is not resident in the UK and sells a UK residential property will be required to notify HMRC and pay any CGT due within 30 days after the property sale is completed (i.e. the date when title is conveyed). The reporting and payment can be completed electronically.

A non-UK resident taxpayer that is already within the UK’s Self Assessment system for Income Tax and CGT will also have the option of paying any CGT due as part of their normal year-end tax payment.

Other exemptions from CGT

Apart from the family home, there are other exemptions from CGT and special rules that apply to gains made in relation to certain other assets, such as:

  • Assets sold for less than £6,000 (e.g.: antiques and paintings);
  • Wasting assets (e.g.: cars and wine);
  • Stocks and shares held in an ISA account;
  • National savings certificates and premium bonds;
  • Winnings from betting, lottery or the pools;
  • Compensation for personal injury;
  • Qualifying enterprise investment schemes.

None of the above exemptions apply when the gains arise through trading or business activities as distinct from occasional sales and disposals.

Business Asset Disposal Relief (BADR)

BADR used to be known as Entrepreneurs’ Relief before 6 April 2020. The relief was renamed in Finance Act 2020. The name change does not affect the operation of the relief.

When you sell a business, shares in a trading company or your interest in a trading partnership, you may be able to claim this relief, in which case your CGT liability will be limited to 10% of the chargeable gain. The present limit for this relief is lifetime gains of up to £1m (£10m prior to 11 March 2020).

The relief is available to individuals who:

  • are in business, for example as a sole trader or as a partner in a trading business
  • have owned the business for at least 2 years.

There are a number of qualifying conditions that you must meet in order to qualify for the relief. The lifetime limit means that you can qualify for the relief more than once, subject only to the fact that 20% tax will be charged once your total qualifying capital gains exceed £1m.

A variant of ER, called Investors’ Relief (IR), is available to investors in unlisted trading companies. This relief applies a 10% rate of CGT to gains accruing on the disposal of ordinary shares in an unlisted trading company up to an additional lifetime cap of £10 million. Shares must be held for a minimum period of three years to qualify.

Other reliefs from CGT re business assets

Business Asset Roll-Over Relief

This relief from CGT is available when you sell a business asset and buy a new asset to replace it. If you satisfy all the necessary conditions you can ‘roll-over’ the capital gain into the new asset. This enables you to postpone your liability to CGT until the replacement asset is sold without itself being replaced by another qualifying replacement.

Incorporation Relief

If you own a business as a sole trader or in partnership with others you may at some point want to convert this into a company. A capital gain will be deemed to arise when you do this by reference to the market value of your business assets including goodwill. A number of options exist in such situations.

One of these involves arranging the incorporation of the business so that it satisfies the conditions necessary to secure ‘Incorporation Relief’.  One such condition is that the entire business must be transferred as a going concern in exchange for shares in the new company.

Gift Hold-Over relief

Where a business asset is gifted or sold for less than its market value, CGT is still chargeable by reference to the market value of the asset. This commonly arises within families, for example, where a parent transfers a business or business premises to their children. In such cases the taxable gain can be postponed until the recipient of the gift sells the asset.

31 March 1982

Although CGT was introduced in 1965, the rules aim to avoid taxing any gain that arose before 31 March 1982.

If you make a capital gain on an asset you owned on 31 March 1982, special rules apply. You will be deemed to have acquired the asset on that date at its then market value. You should then use that value instead of the actual costs prior to that date when computing your taxable gain. The indexation allowance on corporate Capital Gains for disposals was frozen as of 31 December 2017.

Record keeping

HMRC do not specifically detail which records should be kept as the records depend on many circumstances.  However, you should ensure you retain any records associated with all material assets you have owned and you should always keep any information you might need to evidence:

  • the figures required to calculate your capital gains and losses;
  • the market value of assets you owned at 31 March 1982;
  • entries on your Self Assessment tax return; and
  • your entitlement to reliefs and exemptions.

Valuations

It will often be necessary to include valuations in the calculations of capital gains. For example if the asset was originally inherited, has been given away or was received as a gift, or when it was acquired before 31 March 1982.

In such cases it is important to disclose on your tax return the name and qualifications of the valuer. Although not a legal requirement, this disclosure should protect you from a late discovery by HMRC. This in turn should remove the prospect that can later demand you pay more CGT plus interest and penalties long after the normal payment date.

How we can help

We would welcome the opportunity to help ensure that you claim all available allowances and reliefs when computing your liability to CGT. We can also undertake these calculations and ensure that you make all necessary disclosures to HMRC. Where necessary, we can also introduce you to appropriately qualified valuers.

We would also be pleased to determine if there might be ways to limit your potential liability to pay CGT. This is something best done long before you realise your capital gains so it is easier if we are familiar with your tax affairs.  We could then discuss with you the steps that you could take to reduce your liability.

We would aim to help ensure that you become liable to no more than the minimum CGT than is legally necessary.

What is Automatic Enrolment for pension’s purposes?

Overview

Automatic enrolment as a general term usually defines a governmental objective to establish pension schemes in which targeted individuals are automatically enrolled. Using this as a basis for setting up such schemes typically results in far higher participation rates than when individuals are left to opt-in to schemes voluntarily. The introduction of automatic enrolment for workplace pensions is intended to ensure that many more employees begin to make proper provision for having a work-based pension.

The rules for automatic enrolment first started to come into effect on 1 October 2012. With the introduction of automatic enrolment, the requirement for an employer to provide access for staff to a stakeholder pension scheme was removed. These pension rules are encouraging employees to start making provision for their retirement - employers and government also contribute to make a larger pension pot.

Automatic enrolment

While staff may be automatically enrolled, there is significant work for employers as a result of the introduction of automatic enrolment particularly small and micro employers. There are also many issues to communicate to employees who need to be informed about workplace pensions. There are specific requirements for employers to notify employees about what automatic enrolment means for them.

As the law currently stands, automatic enrolment applies to all employers who have at least one member of staff. This means that most businesses in the UK are now obliged to set up and administer a pensions scheme for qualifying employees.

The rules only apply for the provision of pensions to employees, not the self-employed.

Contributions for automatic enrolment

Both the employer and employee need to make contributions to a pension scheme. There is currently a minimum employer contribution of 3% and employers can make higher contributions if they so decide. Employees must also make contributions which are part funded by tax relief. Total contributions are a minimum of 8%: 3% from the employer, 4% from the employee and an additional 1% tax relief.

There is also a qualifying earnings amount that is set by the Department for Work & Pensions. There is no requirement to begin making contributions until after an employer’s staging date.

For the current (2022-23) tax year this is set between £6,396 and £50,270 a year. This means that the first £6,396 of an employee’s earnings isn’t included in the automatic enrolment calculation. For example, if a worker earns £25,000 their qualifying earnings would be £18,604. The maximum amount contributions can be based on is £43,874 (£50,270 minus £6,396) for the 2022-23 tax year.

Enrolling employees

The law states that employers (after their staging date) must automatically enrol workers into a workplace pension if they are:

  • Aged between 22 and State Pension Age.
  • Earns more than minimum earning threshold (£10,000) per year.
  • Work in the UK.
  • Not already a member of a qualifying work pension scheme.

There are special rules for employees earning less than £10,000, who will usually have the right to opt in to the scheme, and employees aged less than 22 years and earning in excess of £10,000. It is important that employers are able to monitor any changes in employee ages and earnings so they can properly enrol any new or existing employees who become eligible at a future date.

It is also important that employers keep their staff informed throughout the automatic enrolment process, for example, by being told how much they will contribute and when.

Whatever their circumstances employers must make eligible employees active members of a pension scheme within a six-week period that starts on the date an employee first becomes eligible for automatic enrolment.

This could be:

  • The employer’s staging date.
  • The day after their postponement period ends.
  • The employee’s first day of employment.
  • The employee’s 22nd birthday.
  • When an employee starts to earn more than £10,000.

Setting up a qualifying scheme?

New employers need to check their staging date and start creating an action plan to prepare for automatic enrolment. They will need to use software that can handle the requirements of automatic enrolment. This can usually be achieved by using their payroll systems. In addition, some pension providers may offer this service, although there may be additional costs.

Employers who do not have a pension scheme or want to change from an existing scheme will need to find a pension provider that offers an automatic enrolment scheme. Proper due diligence should be used to ensure that any scheme providers identified are well run and meet all the necessary legal requirements.

Most employers are likely to use schemes that are known as defined contribution (DC) schemes. This is because these types of scheme do not offer a fixed pension amount on retirement. This means that employers are only committed to paying a finite amount into the scheme.

Employers who already offer a workplace pension may not notice many changes, but there are significant changes for those employees that will be joining a work-based pension for the first time. Employers need to check that any existing scheme is a qualifying scheme within the rules for automatic enrolment.

Accessing pension funds

Employees will usually be unable to access their pension’s savings until they are 55. There are special rules for individuals that are seriously ill. They will also be able to have some choice over how risk sensitive they want their investments to be. There are also Sharia-compliant and ethical funds available.

Opting out of a pension scheme

Employers are not allowed to try and encourage employees to opt out of a pension scheme. This is known as 'inducement'. However, an employee is allowed to opt out of a pension scheme if they so wish. They will obviously lose out on valuable contributions from their employer and the Government.

There are certain rules which must be met in order to opt out of a pension scheme. In addition, employees will usually be re-enrolled again every three years or after starting a new job. If this happens and an employee still wishes to opt out, they will need to complete the opt-out process again.

There are safeguards in place to prevent employers from:

  • Unfairly treating their employees because they decide not to opt out.
  • Trying to advise staff to opt out.
  • Not recruiting someone because they don’t agree to opt out.

Penalties

There are many complex rules that employers must follow in implementing and running a pension scheme. If an employer fails to comply with their duties, the regulator may take enforcement action and issue compliance and /or penalty notices.

 

Overview

Most day to day business expenses can be deducted from business income when calculating your taxable profits. However, the rules are different for ‘capital’ expenditure. ‘Capital allowances’ is the term used to describe the allowances which allow businesses to secure tax relief for certain capital expenditure. Most ‘capital’ items, such as computer equipment, vehicles, machinery etc, last for more than a year or so. The tax rules do not allow you to automatically deduct the full cost of such items in one go. And different rules apply to different types of capital expenditure. In some cases, no tax relief is available at all even though you may have spent the money solely for business purposes.

This guide provides an overview of the main types of capital allowances that can be claimed and is aimed at businesses with relatively straight forward tax affairs.

Capital allowances are available in respect of:

  • Most ‘plant and machinery’ used for business purposes;
  • Certain building works - for example converting space above commercial premises to flats for renting;
  • Certain research and development expenditure.

Your entitlement to claim capital allowances is usually unaffected by how you pay for the items in question. For example, if you buy an item on hire purchase you can claim capital allowances based on the full normal cost of the item. The interest you pay and other charges are not part of the capital cost of the item but can usually be counted as deductible business expenses.

If you simply rent capital equipment, and do not secure ownership of the items, no capital allowances can be claimed. Instead the payments due, under what is usually called an ‘operating lease’, are simply deductible as a normal business expense

Plant & Machinery

The official term ‘Plant and Machinery’ (P&M) includes items such as cars, vans, machines, equipment, computers, furniture and other similar items used by a business.
Some of the rules related to P&M depend on the nature of the expenditure and how much money has been spent on P&M during the accounting period. There are also special rules to provide tax relief for items of P&M you used privately before using them in your business and items that you only partly use for business purposes.

Annual Investment Allowance (AIA)

The AIA is available to all businesses regardless of size. This AIA allows businesses to write off 100% of the cost of qualifying P&M, up to the allowed maximum, against taxable profits.

The limit was permanently set at £200,000 from 1 January 2016. There is a temporary cap in place of £1,000,000 until 31 March 2023. From 1 April 2023, the AIA is expected to revert back to £200,000 after the temporary increase comes to an end.

Writing Down Allowances

For plant and machinery expenditure that exceeds the AIA and which does not qualify for a First-Year Allowance (see below), a standard 18% Writing Down Allowance (WDA) is available. This is based on the cost of the items in the year they are acquired.

First-Year Allowances

A new temporary FYA “super-deduction” and an FYA “special rate” deduction were introduced from 1 April 2021. These new FYA’s allow businesses to increase the tax relief they can claim for qualifying investments in plant and other equipment. The new reliefs will apply until 31 March 2023. The super-deduction will mean that assets will qualify for tax relief based on 130% of the actual cost of expenditure incurred. Assets that qualify for the special rate relief will qualify for the 50% FYA.

The existing 100% FYA will continue to apply for certain expenditure such as designated freeport sites and zero-emission good vehicles.

Special cases

Most plant and machinery is treated in a standard way for capital allowances, however there are special rules for expenditure on:

  • Cars.
  • Long-life assets.
  • Short-life assets.
  • Integral features of buildings and thermal insulation.
  • Assets bought by businesses and then leased out.

Cars

Qualifying expenditure on cars must be allocated to one of two general P&M pools of expenditure. Which pool is appropriate depends on the car’s CO2 emissions.

Cars that have an element of non-business use, by the self-employed, must be allocated to a single asset pool to enable the private use adjustment to be made. New and unused electric or zero emission cars benefit from 100% capital allowances.

Short-life assets

There are special rules when a business purchases equipment that it expects to keep for a short time or that is expected to wear out quickly.

If the life of the asset is ‘short’, businesses can choose to calculate the capital allowances outside the main pool. This will generally mean more tax relief but only when the assets are written off, scrapped or sold.

Long-life assets

This term refers to assets with an expected useful life of more than 25 years. The tax allowance here is set at 6% (2021-22: 6%) of the written down value each year with all expenditure on long life assets being added to a special 6% rate pool.

Integral features of buildings and thermal insulation

The same relief as for other long life assets is also available for the cost of new or replacement 'integral features' of a building.

Such features are:

  • Cold water systems.
  • External solar shading.
  • Lifts, escalators, and moving walkways.
  • Active facades electrical systems (including lighting systems).
  • Space or water-heating systems, powered systems of ventilation, air cooling or air purification, and any floor or ceiling comprised in such systems.

Businesses can also claim the 8% allowance each year for expenditure on installing thermal insulation in all existing buildings used for any qualifying business purpose - other than if it's a residential property business.

Research and Development

R&D tax credits were introduced for Small and Medium Sized Enterprises (SMEs) in 2000 and for large companies in 2002. R&D credits are a CT relief which were introduced to encourage innovation and enterprise within the UK economy. SMEs can currently claim R&D tax credits of 230% for expenditure incurred on or after 1 April 2012.

Large companies can claim a 13% (2021-22: 13%) R&D expenditure credit for qualifying expenditure.

The rules as to what qualifies in this regard are complex. In general, however, a project qualifies as R&D if:

  • It seeks to achieve an advance in science or technology.
  • The research is relevant to the business.
  • The business is of a trading nature as distinct from someone working in a profession or vocation.

Structures and buildings allowance (SBA)

A new structures and buildings allowance (SBA) was introduced as part of the autumn Budget 2018 measures. The SBA provides tax relief for qualifying capital expenditure on new non-residential building where all contracts for the physical construction works are entered into on or after 29 October 2018. The relief does not include the cost of land or dwellings. The SBA is set at 3% (2021-22: 3%) calculated on a straight line basis.

Assets leased out

In certain circumstances businesses can claim capital allowances for assets they own and lease to other businesses.

Private use

This section is only relevant if you operate your business as a sole trader or partnership and is therefore not relevant if your business is a limited company.

Where a business asset is used partly for private purposes the entitlement to capital allowances are restricted. The asset is not included in any pool but is the subject of a separate calculation.

The allowances are computed in the normal way so can in theory attract the 100% AIA or the relevant Writing Down Allowance.

However, only the business use proportion is allowed for tax purposes. Private use of assets by employees does not require any restriction of the capital allowances.

Claiming capital allowances

All claims for capital allowances are made through the business’s annual tax returns.

You do not need to claim the full amount of the available allowance. You might choose to limit your claims to capital allowances to avoid other allowances or reliefs being wasted.

How we can help

We would welcome the opportunity to assist you in maximising your claims to capital allowances. We can also help you arrange your business expenditure generally so as to maximise your entitlement to secure tax relief.