Stop the leaks!

JOHN LOVELL illustrates situations where capital allowances get overlooked.

MANY COMPANIES AND tax advisers find capital allowances troublesome. They fit awkwardly between property tax and accounting knowledge. Since these disciplines tend to be separate functions they rarely understand or communicate well with each other. It is a bit like the poem about the blind men and the elephant. The first blind man touched the tail and said an elephant was like a rope. The second held its trunk and claimed it was like a snake. The third felt the tusk and claimed it was like a spear and so on. The point of this allegory is that individually the men could not describe the whole elephant although (if they had listened to each other) together they could have done. It is essential with capital allowances that these separate disciplines and knowledge bases effectively communicate...