Understanding Embedded Capital Allowances (ECA)
Many commercial property owners are unaware that they could be entitled to substantial tax relief through Embedded Capital Allowances (ECA). These allowances enable businesses to claim tax relief on qualifying fixtures and features that are permanently embedded within their property.
If you own a commercial property and have never explored an ECA claim, you could be missing out on valuable tax savings. But how do you know if your property qualifies?
What Are Embedded Capital Allowances?
Embedded Capital Allowances refer to the tax relief available on certain fixed assets within a commercial property. These assets typically include:
- Electrical and lighting systems
- Heating and ventilation systems
- Air conditioning
- Lifts and escalators
- Plumbing and sanitary fittings
- Fire and security systems
- Data cabling and telecoms infrastructure
Because these elements are integral to the building, they are often overlooked in standard capital allowance claims. However, they can represent significant tax savings when properly identified and claimed.
Does Your Property Qualify?
To be eligible for an Embedded Capital Allowance claim, your property must meet the following key criteria:
1. The Property Must Be Commercial
ECA claims apply to commercial properties used for business purposes. Qualifying property types include:
- Retail units (shops, supermarkets, department stores)
- Offices (corporate buildings, serviced offices)
- Hotels & Hospitality (hotels, B&Bs, pubs, restaurants)
- Healthcare (care homes, private clinics, dental practices)
- Industrial & Manufacturing (factories, warehouses, production units)
2. You Must Own the Property
Only property owners can claim Embedded Capital Allowances, meaning tenants or leaseholders are generally not eligible. However, long leaseholders with a capital expenditure responsibility may still qualify.
3. The Property Must Have Undisclosed Capital Allowances
If Embedded Capital Allowances have not been previously claimed on a property, there is an opportunity to unlock tax savings. Many businesses are unaware of these allowances because they were not identified at the time of purchase.
4. The Property Must Be Used for a Qualifying Business
The commercial property must be used for an operational trade or business. Investment properties solely for rental income, such as buy-to-let residential properties, typically do not qualify. However, serviced accommodation and holiday lets may be eligible.
How to Claim Embedded Capital Allowances
If your property meets the above criteria, you may be entitled to claim ECA and reduce your tax liabilities. The process involves:
- Initial Consultation & Free Estimate – At Hypertech Partnership, we offer a complimentary assessment to determine if your property qualifies.
- Specialist Property Survey – Our team of expert surveyors conducts an in-depth review of your property to identify qualifying embedded fixtures.
- Claim Preparation & Submission – We compile a detailed report, ensuring compliance with HMRC regulations, and submit your claim.
- HMRC Review & Approval – We handle all correspondence with HMRC to secure approval and ensure the best possible outcome for your claim.
Why Work with Hypertech Partnership?
At Hypertech Partnership, we specialise in managing Embedded Capital Allowance claims for commercial property owners. Our comprehensive service ensures that you receive the maximum tax relief available, with no upfront costs and a no-win, no-fee guarantee.
Find Out If Your Property Qualifies
If you own a commercial property and have not yet claimed Embedded Capital Allowances, now is the time to explore your entitlement. You could be sitting on unclaimed tax relief that can significantly improve your business’s cash flow.
