Tax Recovery Services

Specialist consultancy set up to help commercial property owners claim capital allowances

Specialist consultancy Tax Recovery Services (TRS) has launched to help clients seek redress if accountants have failed to claim capital allowances (CAs) when commercial properties are sold.

CAs allow the cost of physical assets, such as air conditioning, wiring, lighting and security systems, to be offset against the capital gain and corporation tax liability on commercial properties, but it must be claimed within two years — if no claim is made before this deadline, CAs can no longer be recovered from HMRC.  

Accountants have a duty to act in the best interests of their client by advising them on all of the available tax reliefs that the parliament has introduced, including claiming CA.

The professional conduct rules of the Institute of Chartered Accountants of England and Wales (ICAEW) emphasise the need for accountants to address the benefits of the tax reliefs provided by CA and their responsibility to their clients for the accuracy of their CT600 company tax return.     

TRS will bring cases against accountants, forcing them to take responsibility for failures through their professional indemnity insurance.

The consultancy, together with a team of specialist tax advisers, solicitors and eight tax barristers, will take cases on a no-win-no-fee basis, supported by after the event insurance (ATE) from a legal insurer that specialises in professional negligence.

It will be acting for sellers of commercial property who have lost out only if the property was sold for over £1m and if the potential losses are likely to be much higher.

According to TRS research, approximately 1,000 commercial property transactions each month are completed without a CA claim ever having been made.

The lost tax benefit in these situations is worth £52,000 on average across the whole market.

Martyn Caplan, CEO at Tax Recovery Services, said: “Negligence is costing commercial property owners hundreds of millions of pounds a year in lost capital allowance claims and, for the first time, we’re going to give them the opportunity to easily recover these losses.

“Where a property has been sold and no capital allowances claim has been made, that’s a massive alarm bell and former owners should immediately establish whether they are out of time to claim.

“Having missed out on this tax relief, owners of commercial property have strong grounds to pursue negligent accountants who will carry professional indemnity insurance for exactly this reason.”

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