Our client is a self-storage and removals company with two main sites. The Directors wished to expand and modernise the business by building a combined head office and self-storage unit on a brownfield site. The property was built to a high standard aiming for BREEAM accreditation and, in addition to usual plant and equipment, included:
– Solar PV
– Passenger and good lifts
– Fire alarms, sprinkler systems and other fire control systems
– Extensive security systems
– Air conditioning and ventilation
– Solar shading
WHY DID SIX FORWARD GET INVOLVED?
We worked with the accountant to optimise capital allowances across the build, which straddled two accounting periods, to maximise utilisation of Annual Investment Allowance (AIA) and other First Year Allowances (FYAs).
With availability of AIA/FYAs, the combined plant and machinery allowances amounted to circa 35% of the build cost to provide immediate corporation tax saving of over £190,000 (at a 25% Corporation Tax rate).
Over the longer term, SBA would provide further tax reduction of over £350,000 at a rate of 3% (£10,600) per annum for 33.3 year.
WHAT WAS THE OUTCOME?
