It is becoming more and more likely that you or your clients will be approached directly by capital allowances advisors to review capital expenditure when properties are purchased or when construction expenditure is incurred. This can be beneficial but is a more reassuring experience if you appoint the right firm.
Here are 10 key qualities to provide some guidance in choosing a potential advisor;
1 Sensible initial conversation
Engaging with a reputable firm of capital allowances advisors will feel like dealing with a trusted advisor who is keen to understand your particular situation and provide appropriate advice. It is unlikely you will receive extensive marketing material with exaggerated claims, terms and conditions of engagement in small print and pushy or repeated sales calls.
2 Relevant professional qualifications
Ideally staff will be dual qualified in tax and surveying with membership of the relevant professional bodies such as Royal Institution of Chartered Surveyors “RICS”, Chartered Institute of Taxation “CTA” and Association of Taxation Technicians “ATT” or any of the accountancy bodies.
This ensures work is prepared on both a technically and ethically sound basis as the advisor will be bound by relevant professional regulations. For example, this will require an independent complaints handling procedure and PII (Professional Indemnity Insurance) is in place.
3 Relevant sector experience
An established firm will have a great deal of sector experience and be keen to provide relevant contact names and references prior to engagement. They will be able to demonstrate their ability.
4 Credibility with HMRC
Involving a capital allowances advisor with an independent specialist firm is likely to gain credibility with HMRC as they will see it has been prepared by professionals in line with current guidance and best practice to identify the tax relief the client is legally entitled to. This will reduce the risk of HMRC investigation, increased tax bills, interest or penalties. Lovell Consulting has the former lead capital allowances specialist from Valuation Office/HMRC.
5 Capability to liaise with HMRC/Valuation Office and other professional firms
An extension of the above is the ability to deal effectively with property professionals such as accountants and lawyers. Since the rule changes introduced from April 2014 it is essential your capital allowances advisor is fully capable of liaising with property lawyers during property acquisitions and effectively drafting contract clauses.
Lawyers are more aware that capital allowances are an issue and can offer a value to their clients through correct completion of the British Property Federation endorsed Commercial Property Standard Enquiries (CPSE.1). Typically a good capital allowances advisor will provide a clear strategy in advance, review the replies and request specific further information, and be able to provide appropriate contract wording so the entitlement to allowances for your client can be safeguarded.
6 No subcontracting
The best type of capital allowances advisor will be able to resource the entire project in-house from survey, detailed analysis through to negotiation, where necessary and agreement with HMRC. Team profiles and biographies on the advisor’s website are a good indication and evidence of transparency in this respect. It is good practice to ask who will be preparing the survey and detailed work by name and ask for their relevant experience and qualifications.
7 Response times
Capital allowances provided by a team of several professionals is likely to give you more comfort that the work can be completed efficiently and on time to meet deadlines. It is important for capital allowances work that responses can be provided quickly when clients buy or sell buildings. Also to complete work efficiently.
8 No conflicts of interest
An independent firm will work alongside your existing advisors without conflict of interest as capital allowances claims are perfectly suited to being treated as a stand-alone project. You should check there are no conflicts for a specific engagement.
An established capital allowances advisor will have sector specific experience and usually be able to provide an accurate indication of the expected level of allowances and immediate tax savings and cash-flow benefit over time.
10 Work with trusted advisors
Finally, it is likely you will choose your advisor based on how well you know, like and trust them; qualities which ultimately cannot be quantified, but the above at least gives some points to consider. A good recommendation from another professional can be a good basis.