Portal Tax Claims said that an estimated 96% of businesses that own their own property could be owed billions of pounds in refunds, as most do not realise they could make a claim to HMRC on the purchase price of their property.
The firm works exclusively on referral cases from intermediaries, with all advisers trained to assess whether their commercial clients are suitable for referral.
Capital allowances are available to businesses buying or improving a property in any tax year. HMRC allows the owners of the property to offset some of that cost against profits or general income for tax purposes, as long as there has not been another capital allowance claim by a former owner during the life of the property.
Commercial properties can include multi-let properties, so a landlord who owns a building split into flats would qualify. However, HMRC rules mean landlords with single-let properties, for example a whole house or a flat within a block, do not qualify.
Shaun Murphy, chief executive of Portal Tax Claims, said: “We have been astonished by the strong and positive reaction from brokers since we launched the trial of our service in June 2010.
“This is not a loophole or a grey area; it is supported by HMRC. However, it is a complex area.”
During the trial period, Portal Tax Claims revealed it reclaimed an average of £105,000 for each business of outstanding capital allowances for items including fire alarm systems, lifts, air conditioning, heating and lighting.
Portal Tax Claims, part of the claims company Portal Group, does not charge an up-front fee and uses independent surveyors to assess the property. It will charge a fee if the unclaimed capital allowances amount to more than £25,000, otherwise the client gets the report for free.
It charges a flat fee of 6%+VAT on the amount of money claimed when a case is successful. Brokers referring cases to Portal will receive commission of 10% of Portal’s fee.
Murphy said: “As a rule of thumb, we can find around 25% of the purchase price of capital allowances. Our fee comes out of the refund, so there no disadvantage to the client.”
He added: “Most owners of commercial property are unaware that such valuable capital allowances are waiting to be claimed. Literally billions of pounds are due to owners, but most lack the expertise to make the claim which can be a complicated process.”
Ying Tan, managing director of The Buy To Let Business, said: “If there is a way to save clients money, then it is clearly positive. The biggest win is that the fee is payable on success, so niether the broker or the client has a great deal to lose. However, both brokers and clients do need to be happy with the company they are dealing with.”
Portal Tax Claims’ basic criteria for businesses to qualify are: the property is classified as commercial (eg shop, office, factory, multi-let etc); it is not held in a pension fund, the government, charity or treated as stock; the purchase price was at least £200,000; and the owner is a UK taxpayer – this could be an individual, an LLP, a plc or a Ltd company.
