Tax incentives on fit-out and refurbishment

Many businesses in the UK do not own their own property but lease from a landlord instead. Fortunately, it is not necessary to own the freehold of a property to claim tax incentives, such as capital allowances.

Claiming tax relief on fit-out and refurbishment expenditure

For a new lease agreement, the property may not be in the best condition for your incoming business. For example, as an incoming occupier, you may want to install signage, branding and you may need to fit-out the space with your own fixtures and fittings. The landlord may have provided the shell, but in many cases, it’s the tenant’s responsibility to fit-out the property for the purpose of their trade.

You will incur expenditure on the fit-out and refurbishment. No matter what type of business it is, much of this expenditure could attract capital allowances and as much as 90% of total expenditure could qualify for tax relief, providing a very beneficial cash flow injection.

However, determining what is claimable is complex. For example, much of what a company installs could be regarded as ‘trade-related’ and therefore may qualify for capital allowances. But only a thorough knowledge of precedent case law can determine this.

How we help

We provide this specialist advice and employ one of the most experienced teams in the UK. We offer a wide range of services, developed to ensure tenants maximise their entitlements to tax relief, such as:

  • Tenancy agreement advice for contract clauses to retain your entitlement to utilise lease incentives and capital contributions to maximise capital allowances
  • An assessment of fit-out expenditure to determine the likely levels of capital allowances available
  • Tax-efficient design services for elements that could attract 100% first-year allowances for water and energy-efficient technology
  • Preparation of maximised valuation reports, capturing capital allowances and revenue expenditure for inclusion in yearly tax returns
  • Full support and substantiation for each capital allowances valuation

Our fully disclosed and transparent valuation reports, compliant methodology and a good working relationship with HMRC ensures we protect your reputation, whilst maximising your entitlement and mitigating against the risk of Discovery Assessments.

Case study – Historical review of enhanced capital allowances

We were invited by a major data centre operator to review £27m of historical expenditure to validate whether the enhanced capital allowances entitlement had been maximised. Our review found qualifying expenditure was undervalued and we were able to improve the total value by a factor of 10.

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Case study – Fit-out and refurbishment

The owner of one of London’s most prestigious office buildings engaged us to carry out a full analysis of expenditure incurred on a program of renovation and refurbishment.

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Enhanced capital allowances

Attracting a 100% first-year allowance, enhanced capital allowances are an important consideration at design stage planning for asset management and new build construction projects.

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Land Remediation Relief

Land Remediation Relief (LRR) attracts 150% tax relief and can be claimed by both developers and investors, regardless of whether the development is held as a fixed asset or as trading stock.

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Real estate advisory services

Assembling the range of expertise you need for any new property investment or development project can be time-consuming and difficult to achieve. With Gateley Group's real estate advisory services, we can project manage this in-house.

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Contact us

Whether it’s a current investment project or you would like to discuss a historical review of expenditure, we can help.

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