A corporation tax deduction is available for the value of embedded fixtures and fittings in commercial property. Companies routinely, by inclusion in their corporation tax computations, claim capital allowances on plant or moveable fixtures purchased in the relevant accounting period.

This provides a reduction in a company’s corporation tax liability up to 100% of the expenditure incurred in the year of purchase up to a total of £1m until 31 March 2023, ie, the annual investment allowance.

There are situations, however, where companies do not claim corporation tax relief on fixtures and fittings that are embedded into the fabric of buildings, eg, air conditioning units, cold water systems, electrical systems, lifts, sanitary systems and water heating systems.