When you buy a large item of plant or machinery you may need to make alterations to your land or buildings in order to install the item.
For example the equipment may require a new concrete base or a specially protected electrical circuit.
The cost of installing equipment is allowed as part of the capital allowances claim for the item. However in the past HMRC have resisted giving capital allowances for the cost of alterations to existing land or buildings where equipment is constructed on the site where it will be used. This is a problem in circumstances where new equipment must be constructed onsite as it is too big to transport in one piece.
The Upper Tax Tribunal has recently ruled that the cost of installing equipment includes constructing an asset in the location where it will be used. This means that if your business incurs costs on installing equipment, alterations to the land and the cost of erecting the equipment will now qualify for capital allowances.
You may be able to submit a claim for capital allowances arising from costs incurred in an earlier period that were previously disallowed by HMRC. We can help you with this.