Are you claiming tax relief on vital children’s nursery resources?

Capital allowances can offer much needed tax relief to a tax paying business. By claiming capital allowances on plant and machinery, in most cases, the full cost of an item can be deducted, reducing the final tax bill. This is achieved using the Annual Investment Allowance (AIA), which has a temporary limit of £1m per annum, as mentioned in our previous article regarding the recent changes in the AIA.

‘Plant and machinery’ may sound like something more likely to be found in a factory rather than a children’s nursery, however, in running a nursery there is likely to be substantial expenditure on items qualifying for capital allowances. With prospective parents looking for a well-equipped and assorted environment to allow children to develop, nursery resources are vital and often expensive.

Here are some areas where capital allowances can be claimed, and examples of specific items found in nurseries:

• Safety equipment e.g. gates and flooring
• Security e.g. alarms and secure doors
• Internal structures e.g. soft play
• External structures e.g. climbing frames and swings
• Catering facilities e.g. kitchen appliances
• Music areas e.g. instruments and audio equipment
• Storage facilities e.g. open shelves and bookcases
• Office areas e.g. computers and filing cabinets

With the new AIA limit being the highest since it was introduced in 2008, there has never been a better time to invest in your nurseries’ assets. If you are looking for advice, support or further information about capital allowances and the amounts that can be claimed, please contact our dedicated EQ Healthcare team today via healthcare@eqaccountants.co.uk or call your local office contact.