Do Carpets Qualify for Capital Allowances Purposes?
One question which does seem to be asked quite frequently is whether you can claim capital allowances on carpets.
HMRC normally accepts both carpets and linoleum qualify for capital allowances as they are plant (see CA21200). The reference is slightly confusing as it does refer to carpets in the context of furniture but in practice carpets have always been accepted as being Plant.
As if to illustrate this point in the case of Anchor International Ltd v IR Commrs [2005] BTC 97 a huge synthetic carpet used for playing five-a-side football was held to be plant. However it should be noted ,generally, HMRC do not accept as plant, tiles which are stuck down. This does mean one grey area is that of stuck down carpet tiles which may be accepted by some HMRC Inspectors as qualifying but possibly not by others. The implication is that floor coverings which are permanently stuck down become part of the structure of the property and therefore do not qualify for capital allowances purposes.
Are you Missing the Bigger Picture?
You have obviously visited this page because you have or are planning to fit carpets in a building. However if you own the freehold of the building have you checked to see whether capital allowances have ever been claimed on the “plant & machinery fixtures in the property?”. This is where the majority of our work is concentrated because, it more often than not, produces large tax savings for our clients. If you own the freehold of a property or have a long leasehold then why not complete our “Free Capital Allowances Estimate Form” to ensure you are maximizing your property related tax relief.
HMRC normally accepts both carpets and linoleum qualify for capital allowances as they are plant (see CA21200). The reference is slightly confusing as it does refer to carpets in the context of furniture but in practice carpets have always been accepted as being Plant.
CA22070 - Plant and Machinery Allowances (PMA): buildings and structures: floors. Floors are in item 1 of List A, S21 (see CA22010) and are therefore excluded from PMAs and so you should refuse a claim for plant and machinery allowances on a floor. Refuse a claim for allowances on raised and mezzanine floors.
Expenditure on the installation of plant and machinery and demolition costs of a property which is held as a fixed asset (not trading stock) will qualify for capital allowances. However, please be aware that expenditure on hire purchases, finance leases and cars have a different set of capital allowances rules.
An important point to remember is capital allowances cannot be applied to residential property, which reduces the tax relief a landlord can claim but does not mean a claim cannot be made. Capital allowance claims are split into categories or pools.
Introduction: My name is Neely Ledner, I am a bright, determined, beautiful, adventurous, adventurous, spotless, calm person who loves writing and wants to share my knowledge and understanding with you.
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