Property developers 'unaware of tax reliefs'

Bosses of small and medium-sized property developers are not making full use of the tax reliefs available to their firms, according to a new report.

The document – Developing: Which Way Now? – suggests that the majority of finance directors and senior management of developers in the residential, commercial, industrial, hotel and mixed-use sectors are unaware of the reliefs that HMRC offer, despite some being available at 100% and enhanced reliefs offering major deductions for capital expenditure.

The report is based on the results of a survey compiled and collated by PKF, the accountants and business advisers over a one-month period between April and May 2009.

Only 31% of respondents expressed knowledge of the business premises renovation allowance, while 44% were familar with land remediation relief, and just 23% knew about flat conversion allowance.

PKF tax director Marios Gregori remarked: ‘It is true that developers have to jump through many hoops just to get to the construction phase, but it seems that this often leads to them overlooking tax reliefs.

‘Even small amounts of tax relief can now make substantial differences to the narrow profit margins on developments in the current market.’

The new report also shows that 92% of developers do not feel they get enough business support from the Government – leading Mr Gregori to suggest that tax reliefs should be made less complex and easier to claim.

‘For example, there have been numerous changes to land remediation relief over the past two years, many as a result of grey areas contained in the tax legislation, which has led to uncertainty for many claimants,’ he said.

‘I’m sure that if developers could be certain of getting the tax reliefs they would be more inclined to use them.’

Categories: News , Business , Income Tax