Commercial property: the reliefs most owners never claim
Shops, offices, warehouses and units. The building itself holds tax relief, and it is usually left on the table.
Commercial4 min readBusiness owners who own or lease premises, and commercial landlords.
The short answer
- The fittings inside a commercial building carry capital allowances worth real money.
- VAT and GST on commercial property is a choice with consequences, not a formality.
- Business rates relief and empty property relief are claims, not automatic gifts.
UK plant and machinery
100% first year
Full expensing on qualifying new items
UK annual investment
£1,000,000
Yearly allowance on qualifying spend
UK structures allowance
3% a year
On the building itself
How it works, in one picture
- 1
You buy or fit out
Split the price between building and fittings
- 2
Claim allowances
Wiring, lifts, heating, kitchens, alarms, air conditioning
- 3
Trade from it
Rates relief, repairs, insurance and interest all deductible
- 4
Sell or let
VAT position, capital gains, and rollover if you replace it
Do it in this order
- 1Get a capital allowances survey on any purchase or refit. It commonly finds 15% to 40% of the price in claimable fittings.
- 2Check small business rates relief and any empty property relief with your council.
- 3Decide the VAT position before you buy, especially where an option to tax already exists on the building.
- 4Keep the fit out invoices itemised. A single line saying refurbishment loses the claim.
- 5Ask about rollover relief if you are selling one trading property and buying another.
Only if you want the detail
Capital allowances, in plain words
The bricks are one thing. The stuff bolted inside is another, and that part is deductible.
VAT and GST on commercial buildings
This is where deals go wrong late.
What people get told, and what is true
My accountant would have claimed the allowances.
Fittings claims need the purchase split out, and on second hand buildings they are missed constantly.
Business rates are fixed.
Small business, rural, retail and empty property reliefs all have to be applied for.
Now do it on your numbers
Reading is the easy half. The saving comes from applying this to your income, your country and this tax year, with the deadline written down.
Where this comes from
General guidance, not personal advice. Anything involving a company, a trust or another country should be checked by a qualified accountant or tax adviser before you act.
Read next
Windfall
Money just landed
Park it. Do nothing irreversible for two weeks.
Business
Where to register
Tax follows where the work is done and where you are resident, not the address on the certificate.
Offshore
Offshore, honestly
Offshore works for genuine cross border business, not for hiding money at home.