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Claim your tax relief

Dealers have been urged to examine the potential tax savings available when they invest in property alterations and modernization.

Alun Oliver, managing director of property taxation specialist E3 Consulting, is undertaking a review of capital expenditure at Poole Audi in Dorset and believes the business will achieve significant tax relief.

In the past 18 months, Poole Audi has spent £850,000 on a 10,000sq ft bodyshop and PDI centre, which is the first on the south coast to be approved to repair Volkswagen Group’s aluminium-bodies cars, such as the Audi A8 and A2.

The business’s new car showroom and service workshop is currently receiving a £1.9m refurbishment. This includes introducing new equipment ready for the Q7 SUV coming next year, a hi-tech service washing facility and additional customer parking.

E3 Consulting expects the company to be able to claim back up to £500,000 in tax relief. “We can identify enhanced tax savings in more than 80% of cases we review. So a great many tax paying motor retailers are giving too much of their hard-earned money to HM Revenue and Customs,” says Oliver.

He believes the Poole Audi case is a good illustration of what other dealers should be doing, particularly those representing franchises that are struggling to maintain profitability in the face of increasingly tougher and expensive manufacturer standards. He urges managing directors to seek advice from property consultants who have a specialist understanding of the taxation and legislation involved.

Oliver, vice-chairman of the Royal Institute of Chartered Surveyors’ south-east regional board, adds: “People often mistakenly treat capital allowances as an afterthought, or even of limited value. But this is far from the truth. The tax savings can be a very significant proportion of the project spend, in some cases even up to 100%.

“Furthermore, effective and timely advice can also enhance the value of savings achieved as substantive data can be collated throughout the project duration, rather than lost for good in a deep archive.”

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