Capital Allowances in a Dentist Surgery
Dentist Capital Allowances refers to the money you as a Dentist spend on purchasing, refurbishing, or building your Dentist Surgery. This spent money creates a benefit for the dentistry you are performing for your customers and is a business expense. This means it is subject to tax relief through a Capital Allowance claim.
Once you identify the Capital Allowances in your property you may then make a claim to HMRC to lower your tax bill going forward, with the possibility of a refund on previous tax years.
How Capital Allowances work in a Dentist Surgery
You run your Dentist Surgery with the purpose of providing dentistry services to customers, possibly on both a private and NHS basis. To do this, it is common for Dentists to utilise the entirety of the property to conduct the business.
So what does this actually mean for you, the Dentist?
When you purchased, built, or renovated your property all those fixtures and integral features integrated into your property can now be claimed under Capital Allowances, which is where your tax relief would come from. This means Capital Allowances may be claimed on everything that comes under:
- electrical systems
- heating systems
- hot & cold water systems
- kitchen equipment
- sanitary ware
There may also be many other assets hidden within the fabric of the building that could be identified for Capital Allowance purposes.
Benefit of Capital Allowances to a Dentist Surgery
Once Capital Allowances have been identified, a report will be issued to your accountant so they may make a filing to HMRC on your behalf.
The valid Capital Allowances may then be applied against your taxable profits, allowing you to claim a tax rebate on taxes paid in the last two years, while providing relief on taxes moving forward.
What happens when Capital Allowances have already been Claimed on a Dentist Surgery?
It is not often that we come across a Dentist that has already claimed Capital Allowances on their property. But when they have, if they made the claim before 2008, or they have since refurbished any part of their property then they may still be able to make a new claim today!
If you believe you have made a claim for Capital Allowances, consider whether you instructed a Capital Allowance expert to create the report or not. If you didn’t, then it is likely that you are within the 90% of Dentists that have never made a claim.
What usually happens is that when you purchased the Dentist Surgery your accountant may have looked at ‘loose chattels’ such as furniture and carpets for tax relief purchases. But that is just a small percentage of what you may be able to claim.
Remember, Capital Allowances are a niche area of accountancy. No one accountant can be expected to know every facet of accountancy and we are offering an add-on service to them and you to ensure your Capital Allowances are completed to their full value.
How Capital Allowances break down for a Dentist Surgery
It is typical for a Capital Allowance report to identify claimable items in a Dentist Surgery worth approximately 25% of the property’s purchase price.
This means that if you purchased your Dentist Surgery for £500,000 you could expect to see claimable Capital Allowances of £125,000 identified.
These identified Capital Allowances of £125,000 would then be applied against your marginal tax rate to provide you with tax relief. So if your marginal tax rate was 40% you could expect to be seeing tax relief in the region of £50,000 which could be s a significant boost to your business!
Engage Commercial Properties Tax for no obligation, Free Audit / Review of your property to determine if you can claim.