Car Dealers – have you claimed your capital allowances?

If you run a car dealership, you might be leaving money on the table if you’re not claiming capital allowances.

Capital allowances can provide substantial tax relief by letting you deduct the cost of certain assets from your taxable profits. Here’s a breakdown of what you can claim and how to go about it.

Workshop Equipment

Think about all the tools and machinery in your service area, lifts, diagnostic equipment, and even the smaller tools used for repairs and maintenance. These are all eligible for capital allowances.

Office Equipment

From computers and printers to office desks and chairs, any equipment used in your administrative areas can qualify. It’s about more than just the big items; even smaller office fixtures can add up.

Showroom Fixtures

Those fancy display units and the lighting setup in your showroom? They qualify, too. Anything that helps you display your cars more effectively can be included.

Integral Features

This covers systems like electrical wiring, plumbing, heating, and cooling within your premises. If you’ve upgraded your electrical system or installed a new heating system, you can deduct these costs. Multiple plug sockets to keep demo cars working are also included.

Vehicles for Business Use

Service vehicles, like tow trucks or vans used for business operations, are eligible. Demonstration vehicles used for test drives can also qualify, but specific rules apply regarding their private use and usage periods.

Energy-Efficient Equipment

Have you installed solar panels or switched to LED lighting? These energy-efficient investments not only help the environment but also qualify for enhanced capital allowances, meaning you can deduct 100% of the cost in the first year.

Land and Buildings

Some of these costs might be eligible if you’ve made significant improvements to your dealership buildings, like renovations or structural upgrades. Security systems, like CCTV and alarms, also qualify. Extended glass frontage, floor tiling and ramps are also included.

Types of Capital Allowances

Annual Investment Allowance (AIA)

This is a big one; AIA lets you deduct the total value of qualifying items up to £1 million in the year they are purchased. It’s a great way to get immediate tax relief on substantial investments.

First-Year Allowances (FYA)

For specific energy-efficient and environmentally beneficial equipment, you can claim 100% of the cost in the first year. This encourages businesses to invest in green technologies.

Writing Down Allowances (WDA)

If you can’t claim the total cost in the first year, WDAs let you deduct a percentage of the remaining value each year. Typically, you can claim 18% for most plant and machinery and 6% for certain integral features and structures.

Maximising your Capital Allowances with Complete Capital Allowance

You probably don’t have the time or knowledge to complete a capital allowance application, and very often, it won’t be the expertise of your accountant. This is where Complete Capital Allowance comes in. Capital allowance claims are all we do.

Our highly skilled team will talk you through our process, which we manage end to end with the minimum input from you. We do all the heavy lifting from completing initial validation and survey, creating a report, submitting to HMRC and subsequent follow-up. And the best bit is that we only get paid when HMRC agrees to pay you.

What have you got to lose? Contact Complete Capital Allowance today!