When defining capital allowances, most people think of the term as the tax relief that a company is given on the tangible capital expenditure. However, you need to know and understand that it is only applicable for specified items of tangible capital expenditure which is normally spread over a fixed number of years. Here is a compilation of the different types of capital allowances and the eligibility criteria.
After you identify the items that are eligible for capital allowances, your next step should be to determine the type of capital allowance that you will be aligning it to as they are different. It is critical for you to know and understand that you can only boast of tax compliance if you have the aligning right, which is totally to your advantage as a business person. It is only when you hire the tax consultancy services that you can have an easy time getting to know what item belongs to what category thus finally helping you stay away from trouble with the tax regulatory authorities.
If you have plant and machinery in your company, you will be eligible for annual investment allowance. If you happen to expend more than the annual limit, you will have to claim the capital allowances as a writing down allowance, which has a whole set of new rates and conditions.
There is also the first year capital allowance which gives you the leeway to claim full percentage of the items that are eligible such as new cars and new plant and machinery for the company. If you received a car in form of a gift and you choose to use it in your company, it will be not eligible for the first year capital allowance. With capital allowances, you only need to know where each and every item lies; only then can you know the much relief that you are getting in the long run.
Given that businesses are different, you need to consider calling in the professional tax consultants so that they can assist you in knowing the items that should lie in each category. As you embark on hiring the professionals, you need to be sure to look into their experience levels and qualifications so that you are working with legitimate personnel; be watchful on registration as well. It is only when you have all the information at your disposal that you can have an easy time going about the choice of the best tax consultant for you, thus making it easy for you to be compliant and avoid trouble with the authorities.