Retailers Capital Allowance Tax To Change

 

Retailers Capital Allowance Tax To Change

If you are a retailer you need to take into account that there might be new tax changes. After the recent publication of a consultation document on capital allowances, Her Majesty’s Revenue and Customs (HMRC) have proposed there be amendments made to capital allowances. These rules will affect the way tax relief can be claimed for expenditure on new business plans. This issue is relevant to many businesses, as it will make a significant difference to the way companies open new stores. And most retailers usually refresh and update their stores on a regular basis.

The proposal is due to go into action next April. Capital allowances operate by allowing companies to reduce their taxable profits, but loss-making businesses are unable to utilise them, meaning that many businesses in the sector are not currently claiming them. The new proposal suggests a shorter period from acquisition in which to make a claim. Currently, there is no time limit in which to make a claim during the period of ownership – so many companies are still making new claims for tax relief on expenditure that was often incurred many years ago.

The tax authorities are inviting comments from retailers on their proposals so for those likely to be hit, it might be worth appealing to the HMRC.

By Jennie May Thompson