Cost model: Property taxation | Features

Principal property taxation allowances
Capital	First year/initial (%)	Subsequent years (%)
Scientific research	100	–
Enterprise zone	100	–
Machinery and plant	25*	25**
Long-life plant	6	6**
Industrial building/hotel	4	4
Revenue
Maintenance and repair	100	–
*40% first-year allowance for small to medium-sized firms (100% in Northern Ireland)
**percentage of allowable expenditure remaining each year (reducing balance)

Legal tests of the definition of plant eligible for tax allowances
Test	Case reference	Outcome
Entity	CIR vs Barclay Curle	Complete entities/systems or, in this case, a dry dock, can be allowable
Premises	Benson vs Yard Arm Club	Premises in which a business is carried out, such as the shell and fixed finishes of a building, are not allowable
Setting	Cole Brothers vs Phillips	Items that are part of the setting, in this case general lighting, are not allowable
Function	Hampton vs Fortes Autogrille Ltd	A suspended ceiling acting as a decorative covering only was not allowed, because it served no function in the business
Amenity	Cooke vs Beach Station Caravans	Amenities provided for use of customers, such as, for example, a swimming pool in a caravan park, are allowable
Remoteness	Ben Odeco vs Powlson	Interest on borrowings is not allowable. It is too remote a cost
Ambience	Wimpy vs Warland	Items that create ambience, such as decorative lighting and pictures, are allowable, if the trade involves attracting customers

Table 1: Refurbishment and developer's fit-out
				tax relief status
	element cost £	cost/m² gfa £	% of total cost	revenue expenditure £	plant/ machinery expenditure £
Demolitions and alterations	527 500	36.38	3.27	10 000	130 500
Demolitions; strip back to structural frame and upper floors; generally			14 500 m²@ £12	no	no
Demolitions; works associated with machinery and plant; stripping out M&E installations, lifts and sanitary fittings			14 500 m² @ £9	no	yes
Alterations and enabling works; generally			14 500 m² @ £14	no	no
Repairs to party walls			Item @ £10 000	yes	no
Allowance for exploratory work			Item @ £10 000	no	no
Substructure	15 000	1.03	0.09	15 000	0
Repairs to existing waterproofing to basements			Item @ £15 000	yes	no
Frame	200 000	13.79	1.24	0	75 000
Alterations and making good existing reinforced concrete frame			Item @ £65 000	no	no
Allowance for new steel structure			50 tonnes @ £1 200	no	no
Altering door openings for lifts			Item @ £75 000	no	yes
Upper floors	23 500	1.62	0.14	0	0
New insitu concrete floor slabs; reinforcement @ £30 kg/m2			135 m² @ £100	no	no
Preparation of existing sub-floors			Item @ £10 000	no	no
Roof	176 600	12.18	1.09	150 000	0
Replacing existing roofing; two-coat mastic asphalt, insulation, vapour barrier; includes allowance for upstands and cappings			1 300 m² @ £100	yes	no
Extra for paving slabs; on neoprene support pads			250 m² @ £30	no	no
Perimeter safety rails; galvanised steel; average height 1.15 m			225 m @ £85	no	no
Repairs to rooflights and roof access hatches			Item @ £20 000	yes	no
Stairs	322 500	22.24	2.00	0	2 500
Alterations and making good to existing stairs			Item @ £40 000	no	no
Insitu concrete fire escape stair; overall length 6 m			Item @ £2 500	no	yes
Contractor-designed mild steel balustrades, stainless steel handrails (cost per storey)			36 @ £5 000	no	no
Cladding and balustrades to feature bridge to reception			Item @ £60 000	no	no
Allowance for access platforms and stairs to plant rooms			Item @ £40 000	no	no
External walls, windows and doors	3 266 700	225.29	20.26	0	3 500
Replacement cladding; granite-faced precast concrete units			2 500 m² @ £650	no	no
Replacement punchhole windows; sealed double-glazed units; thermally broken; bronze anodised finish			2 800 m² @ £500	no	no
Allowance for entrance screens and revolving doors to reception			Item @ £160 000	no	no
Marble cladding to entrance and reception			180 m² @ £240	no	no
External escape doors; double doors; steel-faced; iron mongery			10 @ £2 100	no	no
Allowance for blast shutters and entrance gates to car park			Item @ £14 000	no	no
Extra for motors and control gear to shutters and gates			Item @ £3 500	no	yes
Internal walls and partitions	160 800	11.09	1.00	0	0
Insitu concrete walls; average 450 mm thick			60 m² @ £120	no	no
Blockwork partitions; 140 mm average thickness; head restraint			3 000 m² @ £35	no	no
Metal stud partitions; two layers wallboard, each side; insulation			320 m² @ £40	no	no
Toilet cubicle partitions			36 @ £800	no	no
Melamine-faced solid laminate access panelling to WCs etc			70 @ £100	no	no
Internal doors	360 000	24.83	2.23	0	62 500
Flush doors; fire-rated; solid core veneer-faced; hardwood frames; iron mongery; complete			350 @ £600	no	no
Flush doors; non fire-rated; solid core veneer-faced; hardwood frames; iron mongery; complete			175 @ £500	no	no
Extra for door closers			525 @ £100	no	yes
Allowance for works in connection with security system			Item @ £10 000	no	yes
Wall finishes	277 200	19.12	1.72	60 000	0
Allowance for alterations and preparation works			Item @ £22 500	no	no
Plasterboard lining to columns			480 m @ £40	no	no
Waterproof render to basement areas			480 m² @ £20	no	no
Cement:lime:sand backings to walls			1 000 m² @ £15	no	no
Ceramic tiles			1 400 m² @ £65	no	no
Plaster skim coat			1 600 m² @ £4	no	no
Paint finishes; two-coat emulsion			13 350 m² @ £3	no	no
Extra for special paint finish to lift lobbies and other public areas			3 350 m² @ £4	no	no
Allowance for localised repairs to plaster			2 000 m² @ £30	yes	no
Floor finishes	670 400	46.23	4.16	82 000	197 600
Natural stone flooring; granite and marble; including allowances for beds and skirtings; to reception area			150 m² @ £220	no	no
Allowance for mats and matwells			Item @ £10 000	no	yes
Raised access floor; 100 mm deep floor void; including allowances for cavity barriers; hardwood skirtings			9 380 m² @ £35	no	no
Carpet tile			9 380 m² @ £20	no	yes
Granolithic screed; 75 mm thick; to prepared concrete floors in plant rooms			500 m² @ £25	no	no
Floor paint; to previously painted concrete			1 000 m² @ £7	no	no
Repairs to existing granolithic screeds and skirtings to stairs and landings			650 m² @ £80	yes	no
Repairs to retained core floor finishes			Item @ £30 000	yes	no
Epoxy floor finish and road markings to car park and access ramp			400 m² @ £25	no	no
Ceiling finishes	486 000	33.52	3.02	30 000	328 300
Suspended ceilings; perforated metal grid; concealed grid; to office areas; including plasterboard ceilings to the perimeter; forming return air plenum as part of air-conditioning system			9 380 m² @ £35	no	yes
Plasterboard ceilings to public areas			1 630 m² @ £40	no	no
Allowance for specialist ceiling finish to reception			150 m² @ £100	no	no
Repairs to retained core ceiling finishes			Item @ £30 000	yes	no
Insulation to car park soffits and other slabs			1 900 m² @ £25	no	no

Table 2: Refurbishment and developer's fit-out
				tax relief status
	element cost £	cost/m² gfa £	% of total cost	revenue expenditure £	plant/ machinery expenditure £
Furniture and fittings	197 500	13.62	1.23	0	157 500
Reception desk and fittings			Item @ £20 000	no	yes
Allowance for furniture to reception areas			Item @ £25 000	no	yes
Statutory signage			Item @ £20 000	no	yes
Allowance for planters to reception and public areas			Item @ £15 000	no	no
Allowance for sculpture to reception area			Item @ £25 000	no	no
Mirrors to WCs			Item @ £2 500	no	yes
Window blinds			2 800 m2 @ £30	no	yes
External signage			Item @ £6 000	no	yes
Sanitary fittings	153 200	10.57	0.95	0	153 200
WCs, urinals, washhand basins; generally			210 @ £300	no	yes
Allowance for fittings for disabled WCs			Item @ £1 000	no	yes
Cleaners’ sinks			12 @ £350	no	yes
Vanitory units; granite			70 @ £500	no	yes
Allowance for hairdryers and macerators			Item @ £50 000	no	yes
Disposal installations	152 500	10.52	0.95	0	51 000
Rainwater disposal; cast-iron downpipes and fittings			14 500 m2 @ £4	no	no
Extra for sump pump installation for sub-surface drainage			Item @ £30 000	no	yes
Waste, soil and vent installation; vertical stacks in cast iron			14 500 m2 @ £3	no	no
Waste, soil and vent installation; connection to stack in uPVC			210 @ £100	no	yes
Water installations	131 500	9.07	0.82	0	101 500
Incoming water main and storage tanks			Item @ £30 000	no	no
Cold water down service; boosted main; local distribution			14 500 m2 @ £4	no	yes
Hot water service; local electric heaters; distribution; insulation			14 500 m2 @ £3	no	yes
Space heating and air treatment	2 287 000	157.72	14.19	0	2 287 000
Gas installation			Item @ £11 000	no	yes
Low-temperature hot-water heating; boiler plant; stainless steel flues; distribution within plant rooms			14 500 m2 @ £15	no	yes
Chilled water installation; chillers and heat rejection plant; distribution within plant rooms			14 500 m2 @ £25	no	yes
Supply and extract ventilation; air-handling units; heating, cooling and reheat coils; ductwork in risers and plant rooms			14 500 m2 @ £16	no	yes
Air-conditioning; four-pipe fan coil installation to office space; low-temperature hot-water and chilled water distribution; condensate drainage; fan coil units; ductwork; insulation; grilles and diffusers			10 100 m2 @ £115	no	yes
Dedicated ventilation systems (WCs, car parks etc)			14 500 m2 @ £10	no	yes
Extra for fire-resistant smoke extract ducts			Item @ £85 000	no	yes
Staircase and lift lobby pressurisation			14 500 m2 @ £5	no	yes
Electrical installations	1 401 900	96.68	8.70	0	1 048 700
Mains and sub-mains installation			14 500 m2 @ £21	no	yes
Small power distribution to landlord’s areas			14 500 m2 @ £7	no	no
Small power to office areas			10 100 m2 @ £12	no	no
Lighting and luminaires; landlord’s areas			14 500 m2 @ £9	no	no
Lighting and luminaires; general office areas; incorporating return air grilles as part of air-conditioning system			10 100 m2 @ £40	no	yes
Emergency lighting installation			14 500 m2 @ £5	no	yes
Lighting control system			10 100 m2 @ £7	no	yes
Power to mechanical services			14 500 m2 @ £6	no	yes
Standby generation; distribution			Item @ £110 000	no	yes
Lift installation	1 120 000	77.24	6.95	0	1 120 000
13-person, electro-hydraulic lift serving 12 floors; 2.5 m/second			7 @ £160 000	no	yes
Protective installations	481 000	33.17	2.98	0	437 500
Lightning protection			14 500 m2 @ £1	no	no
Earthing and bonding			14 500 m2 @ £2	no	no
Sprinkler installation; complete			14 500 m2 @ £25	no	yes
Hose reel installation			Item @ £50 000	no	yes
Dry riser installation			Item @ £25 000	no	yes
Communications installations	350 000	24.14	2.17	0	350 000
Fully addressible fire and smoke detection and alarm system; voice alarm			14 500 m2 @ £15	no	yes
Allowance for security, CCTV and access control			Item @ £60 000	no	yes
Wireways for telephones, data and structured cable			14 500 m2 @ £5	no	yes
Special installations	597 500	41.21	3.71	0	597 500
Building management system			14 500 m2 @ £25	no	yes
Cradle cleaning system			Item @ £235 000	no	yes
Builders’ work in connection	334 000	23.03	2.07	0	307 000
BWIC with plant and machinery (allow 5%)			Item @ £307 000	no	yes
BWIC with non-allowable services (allow 5%)			Item @ £27 000	no	no
Preliminaries and contingencies	2 428 000	167.45	15.06	57 300	1 275 500
Testing and commissioning associated with machinery and plant			Item @ £90 000	no	yes
Testing and commissioning			Item @ £10 000	no	no
Contractor’s overheads, site establishment, site supervision
Prelims; in connection with revenue works, plant and machinery (allow 12%)			Item @ £877 200	yes	yes
Prelims; in connection with non-allowable works (allow 12%)			Item @ £765 800	no	no
Contingency sum
In connection with revenue works, plant and machinery (allow 5%)			Item @ £365 600	yes	yes
In connection with non-allowable works (allow 5%)			Item @ £319 400	no	no
Total construction cost Refurbishment and developer's fit-out only	16 120 300	1 111.74	100.00	404 300	8 686 300

Tenant’s fit-out
				tax relief status
	element cost £	£/m² net lettable area	% of total cost	revenue expenditure £	plant/ machinery expenditure £
Internal partitions	220 500	21.83	7.17	0	110 500
Plasterboard stud partition			2 750 m² @ £40	no	no
Demountable partition, frame and hung panel system			800 m² @ £65	no	yes
Glazed office fronts; excluding doors			650 m² @ £90	no	yes
Internal doors	171 300	16.96	5.57	0	81 300
Flush doors; non fire-rated; solid core veneer-faced; hardwood frames; iron mongery; complete			180 @ £500	no	no
Glazed doors; to demountable partitions; iron mongery; complete			65 @ £1 250	no	yes
Wall finishes	183 500	18.17	5.97	0	0
Paint finishes; two-coat emulsion			2 800 m² @ £3	no	no
Extra for specialist paint finish			1 200 m² @ £4	no	no
Fabric wall finish; applied to plasterboard			400 m² @ £35	no	no
Timber panels to meeting rooms etc			400 m² @ £350	no	no
Ceramic tiling			250 m² @ £65	no	no
Floor finishes	68 700	6.80	2.23	0	38 500
Vinyl sheet flooring; heavy duty; to support areas			720 m² @ £25	no	no
Linoleum flooring to vending areas			250 m² @ £20	no	no
Carpet to circulation and meeting rooms (average rate)			700 m² @ £55	no	yes
Ceramic tiling			110 m² @ £65	no	no
Ceiling finishes	83 300	8.25	2.71	0	30 000
Suspended ceiling; mineral fibre tiles; concealed grid; to support areas			720 m² @ £25	no	no
Extra for moisture-resistant tiles to kitchen areas			100 m² @ £5	no	no
Plasterboard feature ceilings to meeting rooms			290 m² @ £120	no	no
Allowance for acoustic insulation in ceiling void between cellular offices with demountable partitions			Item @ £30 000	no	yes
Furniture and fittings	300 000	29.70	9.76	0	300 000
Allowance for fixed furniture, counters, shelving, racking and signage to support areas			Item @ £85 000	no	yes
Allowance for fixed furniture and fittings to meeting rooms			Item @ £10 000	no	yes
Allowance for fixed furniture and fittings to dining rooms			Item @ £35 000	no	yes
Allowance for fixed furniture and fittings to vending/copy points (12 number)			Item @ £150 000	no	yes
Hand-held fire fighting equipment			Item @ £10 000	no	yes
Allowance for directional signage			Item @ £10 000	no	yes
Special equipment	100 000	9.90	3.25	0	100 000
Kitchen installation complete, included dedicated extract system			Item @ £100 000	no	yes
Water and disposal installations	40 000	3.96	1.30	0	40 000
Water and drainage installation to on-floor vending, sick room etc			15 @ £1 000	no	yes
Allowance for water and drainage to kitchen			Item @ £25 000	no	yes
Mechanical installations	252 500	25.00	8.21	0	252 500
Allowance for modifying mechanical installations in office and support areas			10 100 m² @ £25	no	yes
Electrical installations	319 200	31.60	10.38	0	198 000
Underfloor busbar small power distribution to office areas and meeting rooms; including taking up existing floor boxes			9 000 m² @ £22	no	yes
Allowance for modifying lighting and other electrical installations in office and support areas			10 100 m² @ £12	no	no
Protective installations	10 000	0.99	0.33	0	10 000
Additional sprinkler heads to suit cellular office layout			Item @ £10 000	no	yes
Communications installations	816 000	80.79	26.54	0	816 000
Flood wiring to office areas			8 300m² @ £75	no	yes
Allowance for taking up and refixing floor tiles in connection with data wiring			8 300 m² @ £10	no	yes
Turnstile entry control with card operation			Item @ £60 000	no	yes
Allowance for modifying fire alarms and other communications systems in office and support areas			10 100m² @ £5	no	yes
Builder’s work in connection	46 000	4.55	1.49	0	42 000
BWIC with plant and machinery (allow 3%)			Item @ £42 000	no	yes
BWIC with non-allowable services (allow 3%)			Item @ £4 000	no	no
Preliminaries and contingencies	464 000	45.94	15.09	0	356 000
Testing and commissioning in connection with plant and machinery			Item @ £20 000	no	yes
Contractor’s overheads, site establishment and site supervision
In connection with plant and machinery (allow 12%)			Item @ £237 200	no	yes
In connection with non-allowable works (allow 12%)			Item @ £75 800	no	no
Contingency sum in connection with plant and machinery (allow 5%)			Item @ £98 800	no	yes
Contingency sum in connection with non-allowable works (allow 5%)			Item @ £32 200	no	no
Total construction cost Tenant's fit-out only	3 075 000	304.44	100.00	0	2 374 800

Location factors
All costs in this article are based on projects in outer London and should be adjusted by the following location factors for projects in other areas.
Inner London	1.06
South-east	0.96
South-west	0.91
East Midlands	0.88
West Midlands	0.88
East Anglia	0.89
Yorkshire and Humberside	0.88
North-west	0.92
Northern	0.88
Scotland	0.89
Wales	0.88
Northern Ireland	0.76