commercial property and capital allowances

[debs127]

Hi everyone,and thankyou in advance for reading and hopefully responding to this post,feel im in a bit of a pickle here despite having an accountant during my 4 years of self employment. Having read hmrc help pages and business link info to seek help and info to release capital from my commercial property it has become evident that possible capital allowances have not been considered on my tax returns so would like some opinions before i potentially embarrass myself questioning the actions? of my accountant/tax advisor so here are the key points in question:
Became self employed/sole trader in feb 2008 and appointed an accountant immediately to oversee tax issues, ni, payroll etc (i do my own bookkeeping) in may of 2008 i bought a delapidated shop that had stood empty for approx 3yrs intending on expanding the retail side of my existing business by opening as a shop and therefore 2nd business premises whilst also converting the upstairs to a self contained 2 bed flat to let. Flat conversion progressed as planned and all was well until the 'workforce' dissappeared leaving the flat all but finished aside from some minor cosmetic jobs and finishing touches, more troubling was the fact that the porfolio of documents promised on completion (that would include all invoices/cash receipts, certification and regulatory documents) never materialised despite all efforts to obtain them, the firm that introduced and regularly used the 'crew' had gone bankrupt and 'dissappeared'!! Realising i could not legally let the flat and was in temp rental accommodation myself i had no option but to abandon the house purchase i was pursuing and move in myself. Undeterred and with the 'bigger picture' still in mind i was able to obtain help with funding etc from family and friends to 'tart up' the shop and get it open for business before christmas 2008. Having verbally told my accountant of the initial purchase and intentions and him being aware of trading at my additional shop i assumed all was as it should be and on preparation of my accounts for that yr i included a note to him advising of the purchase price of the property and of the conversion/renovation costs and that i realise the info probably wasnt relevant due to the lack of receipts and was a stupid position to find myself in but i would let him decide that. Having been so 'bogged down' with keeping my head above water and going from 4 employees and 2 outlets to just myself operating the original business (still own and live above the shop although it hasnt traded for 18months) i despair at how difficult it has been to operate and maintain a small business whilst also finding it impossibly difficult to release any money from the 100% ownership of the commercial property (to renovate properly and re-open as originally planned) by way of mortgage(because it falls foul of domestic on 1 hand and is not currently trading on the other) or any business loan because it isnt listed as an asset in my accounts??? Am i really so disillusioned and unlucky or have i made a poor choice in accountant and should have had a little more flexibility with the tax man by way of allowances being applied etc?
Many many thanks in anticipation of your response and apologies for reading such a long winded 1st post,kind regards Debs

[tom 7000]

As I understand it you want your accountant to claim capital allowances on a refurbisment cost although you received no invoices from the builder setting out what was done so that the correct split of repairs/ capital improvement/ plany and machinery could be accurately ascertained. Bit tricky. Did you have a detailed tender document and bill of quantities that may be used to ascertain the split. HMRC might accept these, but it doesnt prove the work was done just that it was tendered for. I wonder what others think?

[debs127]

Hi and thanks for your response Tom, your understanding of my post is good despite OP being so 'scattered' too many sleepless nights i guess!
It seems i meet all criteria for claiming flat conversion allowance (FCA)but the absence of any relevent documentation,bill of cost etc does indeed seem a ridiculous claim to pursue.
Problem:

I had nothing other than the verbal agreement of costs,budget,project management,approvals etc from the agent and following an assessment/inspection of the property by the 'gang' of tradesmen he used on his properties, a fixed rate price of 35k cash was agreed with a 2k contingency. As stated all major works were satisfied on time and on budget but the porfolio of documents(i had witnessed the existence of the portfolio on several inspections) vanished with the agent.

Possible solution:(my thoughts,opinions welcome)

I have the full structural surveyors report obtained at time of purchase containing detailed description and condition of property at that time and could help to prove the works have indeed been done to create the s/c flat since?

Have the bank statements from time of purchase(showing purchase transaction) and following showing regular large (pre authorised,where reason for requests were always questioned ) cash withdrawals at time of works being done to the exact cost of works to be claimed,35k. Therafter empty!!

Having ploughed so much into the original self employment retail business and having invested in a crumby shop (albeit with a superb flat) i only wish to have the commercial property(shop) recognised in my business accounts for future lending and possible tax allowance purposes, kind regards Debs