As the era of post-COVID-19 blockade imposes lawsuits on low- and efficient car retailers, Alun Oliver, managing director of E3 Consulting, explains why it would possibly come time for a thorough review of asset tax.
“Money is king,” a mantra cited by business gurus as Jack Welch (former CEO of General Electric).
For many car dealerships and repair centers in a post-COVID-19 world, it will be imperative to optimize all loose money to help weather the typhoon as corporations seek to stabilize and rebuild their finances, brands, market percentage, and profitability.
The tax power is a detail of any review of money flows and specific distributors who, in the past, have invested specifically in their genuine real estate assets, be they their corporate offices, new showrooms, valet valet, electric charging stations and/or repair/service workshops across the UK.
For any asset with business, getting a better flow of money can be relatively complicated in any economic climate, however, at such exceptional times, an asset tax review can be a cost-effective and, above all, relatively immediate form of money flow. through giant tax breaks.
Whether owning, renting or investing, there are significant opportunities to claim capital deductions (CA), conservation and maintenance (R
In nearly 30 years of asset tax cash activity, I still consistently see more than 80% of the revised cases, where no claim has been made, or only one superficial claim has been made, meaning that more tax savings can almost be achieved.
It is therefore imperative that UK taxpayers re-verify beyond tax returns and employ experienced and independent asset tax specialists to think again and review beyond spending to improve their tax savings and, if necessary, unload for tax cuts.
Customers feel that they are too late to make a difference, that the amount of tax is too low a concern, or that prices are prohibitive.
Sometimes their tax advisers even reinforce this “do nothing” technique, because they don’t need to illustrate the tax savings they had overlooked in the past, resulting in unnecessary tax payments.
However, as long as the assets are still maintained, it is valued beyond expenses to see if more tax savings can be claimed.
Historical Reviews
A recent task that reviews a portfolio of concessions across the Southeast, paying corporate taxes.
We reviewed ten renovation/equipment projects, which accounted for more than four million pounds of expenses between 2015 and 2019. The broker had not claimed capital deductions on those properties. Your overall fiscal savings over time will be almost 500,000 euros.
Changing your tax returns last year resulted in a significant tax refund from HMRC, as well as other long-term allocations, cutting your long-term tax payments, until all allocations are consummated.
By performing for Westover Holdings, we carry out a comprehensive capital allocation at its newly built Jaguar Land Rover (JLR) dealership in Christchurch (now sold to Hendy Group).
Identify approximately 35% of the allocation as eligible capital deductions: your total tax stored over time will be more than 200,000 euros.
Election Section 198 CAA2001
Buyers of second-hand goods believe (or are encouraged to do so through their seller) that no other tax relief can be obtained on an acquisition involving a segment choice.
However, this is rarely the case and there are “latent” concessions.
Elections are confusing and asset taxes are rarely understood through the lawyer guilty of the movement of assets. Therefore, tax relief is ignored or a limited electoral price is presented ($1/2) as a “consummated event”.
In the absence of an express wording of the contract, the parties have up to two years to agree to the optional selection under segment 198, which determines the price of any capital deduction that may be transferred between the parties.
However, experienced asset tax experts will identify significant tax exemptions in addition to any proposed or completed options. These would possibly be purchases for which the distributor was not entitled to claim compensation, legislative adjustments or where prices have been paid through others.
Claims of complete services as provisions (IFA) alone can constitute between 5% and 15% of the purchased care and are calculated as a breakdown of the valuation of the acquired value paid. 198 – possibly would still result in additional tax exemptions and therefore additional savings or tax refunds.
Repairs and (R
Repairs are eligible for a tax deduction and as the recent case of Steadfast Manufacturing shows
Again, we see taxpayers claiming or not claiming at all, believing that their expenses are not eligible.
On the contrary, there are those whose accountants traditionally claim all the expenses of real estate such as R
Land Rehabilitation Tax Relief (LRTR)
Land Remediation Tax Relief (LRTR) can also provide valuable tax relief (up to 150%) on all concessionaire projects subject to UK corporation tax.
The LRTR will apply to expenses eligible to address progression barriers caused by infected and/or long-term deserted land.
In addition, if an LRTR claim results in a loss for the company during the accounting period, it would possibly waive that loss and obtain a tax credit payable to HMRC.
The credit rate, 16% of the loss of recovery of eligible land, has not been adjusted since its inception and is very favorable compared to the existing corporate tax rate of 19%.
Conclusion
If your company has already invested in the acquisition, development, expansion or renewal of sites, a re-review of your asset tax scenario can result in significant tax relief and/or long-term savings.
The examples above would possibly help illustrate some of the possible future claims that would possibly be obtained in the automotive sector.
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They haven’t been done at this time.
Live Automotive Management: where franchised and independent dealers will have everything they want to function, a trendy showroom and a service and repair center adapted to the virtual era.
When: November 12, 2020
Where: Birmingham NEC
AM Magazine: 2020 publication on the Newspress Awards automotive industry
www. am-online. com is the leading automotive industry in the UK with a market percentage of 56% (on-site visits, December 2019), according to Hitwise.