We spoke with Dave Collier, Director of CA Tax Solutions, to found out a bit about how they help individuals and small businesses make savings on their tax bills....
1) Firstly, what exactly does CA Tax Solutions do?
We help owners of commercial property – from offices and warehouses to medical centres and furnished holiday lets – recover the unclaimed capital allowances that exist within their properties. If you’ve not come across them before, capital allowances are a valuable form of tax relief available to anyone incurring capital expenditure buying, building or making adjustments to commercial property. The problem, historically, has been that identifying capital allowances within commercial properties is extremely complex and a very specialist area, so much so that even accountants only scratch the surface. Therefore few commercial property owners have been properly alerted to it and have had the tax rebates they are due. Indeed, while your client’s accountant will claim on more obvious items such as shutters and curtains, fire extinguishers, floor tiles or carpet, generally speaking they will not drill down to the items where the far more significant costs to a business lie. These might include air conditioning or heating systems, (emergency) lighting and security systems, plant and machinery items. Also, we estimate that a massive 90% of commercial property owners will have the right to some level of claim, which can range from a few thousand pounds to several million.
2) How long have you worked for CA Tax Solutions and what did you do before?
I’ve worked at CA Tax Solutions for three years now. Prior to that, I worked as a property developer and a mortgage broker.
3) What do you predict happening in the debt management sector over the next 12 months?
We’re certainly not through the current economic downturn yet — and it could be some years before we are. The first wave of insolvencies, personal and corporate, are now behind us but many companies and individuals are still struggling and further waves are likely. Therefore, the sector looks set to continue to grow in at least the short term.
4) How many companies don’t understand that they can claim capital allowance?
The vast, vast majority of companies out there have no idea that they can make a claim. Most don’t even know what capital allowances are.
5) How can this help companies cut their overall expenditure?
Capital allowances rebates don’t help firms cut their expenditure as such but what they can do is provide a significant capital injection at a time when many companies, struggling in the current economic climate, need it most.
6) How straightforward is the procedure?
It’s straightforward enough for the client but can be quite technical for us — but then technical is our expertise. Basically, we start by establishing the capital allowance history of the property. The main thing, at outset, is to ensure the client will benefit from the exercise and that we are aware of all the details of any prior claims made by the accountant. If we feel that unclaimed capital allowances exist then we will carry out an in-depth forensic survey of the entire site. We are essentially identifying items that fall within the definitions of Plant and Machinery as laid down in the Capital Allowances Act 2001 and will therefore qualify for capital allowances. Using cost models and data sources accepted by HMRC, we produce a report detailing the grounding for us making a capital allowances claim on items within the property along with a breakdown of the claim amount. We then send the report and guidance to the client and accountant on how to submit the claim to HMRC. The result is almost always positive.
7) Do you charge fees?
Yes, we charge clients a survey fee and a report fee of 7% plus VAT of the total allowances identified — but only if they amount to £50,000 or more. If the client is a limited company then the fee chargeable comes down to 5% plus VAT. It’s also worth stating that we only charge the client a fee if we uncover capital allowances totalling more than £50,000, so there is no financial outlay for them at all.
8) Do you offer brokers commission?
We most certainly do. The introduction fee payable will naturally vary according to case and volume but we pay from 15% of our fee.
9) How do brokers benefit from telling their clients about your company?
Brokers benefit by making some serious money for doing very little indeed. And if a referral results in a client making a sizeable rebate, that alone is invaluable from a client relations perspective. The strength of this proposition is that nine out of ten owners of commercial property will be due a rebate of some kind, so rarely will the effort made by the broker go unrewarded.
10) Can the service be used in conjunction with debt management?
It certainly can. A lot of struggling companies and individuals who own commercial property will be sitting on unclaimed capital allowances that could make a real difference to their financial position.
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