Tax and Capital Allowances are rarely a subject to get the pulse racing, but in times such as these when it is very difficult to make the Surgery funding stack up, tax can be the critical factor in making a project viable.
Of particular interest at the moment is the opportunity for practices in leased premises to acquire the freehold. Surgeries formerly owned by the PCT were transferred to a new Property Company in April, and the mandate of this company is to ‘maximise value’ for the government. This is likely to mean that rents will be set at commercial levels (not necessarily the same as the level of rent reimbursement) and service charges will be set to recover all service costs. DR Solicitors has been working on a number of lease templates for such properties, and negotiated many new or updated leases.
As an alternative to a new lease, some practices are exploring the option of acquiring their freehold. The NHS Property Company seems open to such proposals, since this is clearly a good way for them to ‘realise value’. If a surgery acquisition can be achieved before April 2014 it should be possible to claim Capital Allowances on the price paid – potentially saving around 20% of the price. This will not be possible after April 2014 so is something that affected practices should be considering now.
Reliefs are also available for internal improvements, and we are aware of many practices submitting surgery improvement plans with their CQC registration. The tax relief on internal improvements can be as high as 75%. Other reliefs which practices should be aware of include the 100% relief for installing energy and water saving technologies in the surgery.
In summary, opportunities exist to use tax allowances to partially finance improvement works on the surgery, but it is important to always consult with a specialist tax adviser at an early stage in the process. At DR Solicitors we work with a wide variety of professionals who specialise in Primary Care, and we would be happy to put you in contact with them.