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18 August 2015
Are capital allowances claimable on the preliminary costs of an office fit-out?
A company is carrying out a major fit-out of new office premises that it plans to occupy in the next year and has obtained a final quote from its builders for this work. As at the year end the company had incurred significant preliminary and professional fees (such as project management fees architects’ and surveyors’ fees) on the project. However the fit-out itself will not be completed until next year.
In JD Wetherspoon plc v HMRC (and cross-appeal) [2012] STC 1450 HMRC accepted that preliminary and professional fees may be apportioned between qualifying and non-qualifying expenditure on a reasonable basis for a capital allowances claim. Accordingly we have analysed the capital expenditure quote between qualifying and non-qualifying expenditure and have used the ratios derived therefrom to attribute qualifying expenditure incurred on the professional fees.
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