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What do you think about bonus systems – are they good staff motivators and what’s in it for all involved?
Capital Allowances for fixtures
July 23, 2012 By Leave a Comment
Major changes to the rules on claiming capital allowances on fixtures in buildings were included in Finance Bill 2012 and buyers of commercial properties risk missing out on significant amounts of tax relief if the rules are not fully understood.
Background
Prior to April 2012 where a building contained fixtures (e.g. sanitary appliances and fittings, hot water and heating installations, ventilation and air conditioning installations and lifts) the buyer and seller could fix the part of the price apportioned to the fixtures by agreeing what is known as a section 198 election. Alternatively, if no apportionment was agreed, the buyer could make their own apportionment on a just and reasonable basis, regardless of whether the seller had previously claimed capital allowances. There was no time limit for the buyer to include any qualifying expenditure in its capital allowances pools and therefore claims could be made several years after the building was acquired.
Changes to this are being implement in two stages. Firstly, there are changes which apply from April 2012 and then further changes will come into force from April 2014.
Changes from April 2012
For expenditure incurred on or after 1 April 2012 (or 6 April 2012 for an unincorporated business) allowances will only be available on fixtures if, within 2 years, either:
- The buyer and seller have jointly entered into a section 198 election, or
- Either party refers the matter to a tax tribunal to determine the amount to be allocated to fixtures.
If, within two years of the transaction, no election is made or the amount is not referred to the tax tribunal, then no capital allowances will be due to the buyer or to any subsequent owner of the property.
Changes from April 2014
From April 2014, if the seller has not previously claimed allowances, the buyer of the property will only be able to claim capital allowances on fixtures if the seller has “pooled” the qualifying expenditure. This means that the seller must include the expenditure in its capital allowances computation in either the accounting period in which the property is sold, or in an earlier period.
Action to be taken
Property buyers and sellers should seek specialist advice when entering into property transactions. If the above requirements are not met then the purchaser and any subsequent owner of the property will never be able to claim capital allowances on the fixtures. This could result in a significant loss of tax relief to the purchaser and may reduce the future selling price of the property.
Author: Alastair Wilson, Tax Partner
It will never happen to me – disaster recovery and how it is fast becoming the norm for SME’s
July 5, 2012 By Leave a Comment
In the wake of Thursday’s severe flooding in parts of the North East of England, Russell Henderson of SITS Group, a Newcastle-based firm of cloud computing specialists, expands on disaster recovery and how it is no longer the exception, but is fast becoming the norm for SME’s.
“It will never happen to me” – this is a phrase which business are increasingly less likely to count on, particularly in light of the recent floods which hit the North East showing that the unexpected can happen; with wide spread disruption for businesses, commuters, charities and emergency services, all due to flooding in what should be a sunny June.
But disaster need not always strike. Cloud infrastructures provide businesses with a method of delivering cost effective disaster recovery solutions, meaning that businesses no longer need to buy double the amount of server hardware to have a failover environment ready to be used; this means that the option of having a disaster recovery strategy in place is now real for many more SME’s than ever before.
Furthermore, the process of testing or actually recovering virtual servers in a private or hybrid cloud environment is simple compared to physical server recoveries, it genuinely takes minutes to recover systems, not hours or days. This allows businesses to test their disaster recovery processes with very little associated time and cost to ensure the processes work as required should they ever be called upon.
These types of disaster recovery solutions lend themselves to all different scales of businesses, from a single server protecting four or five critical business servers, to a cloud solution offering protection for all business systems at costs far lower than was previously possible before virtualisation technology arrived.
Historically businesses invested in disaster recovery solutions, some as a tick box exercise for insurance purposes, others truly deployed solutions to recover the business should the worst happen; most of these businesses shared the same fear, the cost and disruption of testing the solutions was greater than the fear of not testing.
Today’s cloud solutions allow businesses to be reassured that their investments in protecting themselves, their customers and their suppliers actually work. We have deployed many cloud solutions of varying scales to many clients over years and around 95% of them included a disaster recovery solution. In conclusion, disaster recovery is no longer the exception; it is fast becoming the norm.
Author: Russell Henderson, SITS Group www.sitsgroup.com
