Capital Allowances for GP Surgeries: Who Actually Holds the Claim

Why a GP surgery claim is a question of who, not what

Most guides to capital allowances on a commercial building answer the wrong question for a GP surgery. They tell you what qualifies. On a modern surgery, plenty qualifies: plumbing run to every consulting and treatment room, clinical hand-wash basins, the ventilation and clinical services in a minor-ops room, cold-chain vaccine fridges, phlebotomy and nurse-treatment fit-out, and the networked clinical IT that ties it together. A purpose-built or heavily fitted surgery sits comfortably in the moderate to high band for embedded allowances.

The harder and more valuable question is who is entitled to claim. GP premises are rarely a simple owner-occupied purchase. They are typically held by a GP partnership, or by a doctor-owned company, and very often they are leased from a third-party developer who built and fitted out the surgery to a healthcare specification. When a developer funds the fixtures and then grants a lease, the developer usually holds the fixtures entitlement. The practice does not inherit that claim simply by moving in. Add NHS premises funding, where the rent is reimbursed through notional rent under the Premises Costs Directions, and the picture of who bore the capital cost gets easy to misread. This page is built around that entitlement question, because on a surgery it is worth more than any list of fittings.

The £800,000 leased surgery: a section 198 election as make-or-break

Take a common structure. A developer builds a new surgery, fits it out to healthcare standard at a total cost of around £800,000, and grants the GP partnership a 21-year lease for a premium, with the rent set to be reimbursed by NHS notional rent. Suppose a specialist survey identifies roughly £280,000 of qualifying fixtures and integral features inside that £800,000, split between loose main-pool plant (the vaccine fridges, examination couches, minor-ops lighting, movable clinical equipment) and special-rate integral features (dedicated ventilation, cold-water and electrical systems serving the clinical rooms).

Who claims that £280,000 pool depends almost entirely on what is agreed at grant of lease. The developer incurred the fixtures expenditure, so the developer starts with the entitlement. If the partnership wants the benefit, the fixtures value passing under the lease must be fixed by a joint section 198 election, made and signed within two years, or dealt with through the lease terms and contribution arrangements. Get that election in place and the partnership can pool the fixtures value attributed to it, relieving loose plant through the Annual Investment Allowance and writing down the special-rate items at 6%. At a partnership tax cost of, say, 40% across the partners' profit shares, a £280,000 pool is worth in the order of £112,000 of tax over its life, much of it accelerated by the AIA.

Miss the election, and the entitlement can be lost to both sides. The developer may have pooled the fixtures and be unwilling to pass value; or nobody addresses it and the partnership's claim on those inherited fixtures evaporates. This is the make-or-break moment, and it happens at conveyancing, not on the tax return two years later. The fridge and the ventilation still qualify. The question is whether anyone secured the right to claim them.

The fixtures that dominate a GP surgery claim

The clinical specification is what lifts a surgery above a plain office. Each of these is tested against the general plant and machinery rules in section 11 of the Capital Allowances Act 2001 and the buildings and structures exclusions that follow it. The items that drive the pool are:

• Consulting and treatment-room plumbing. Hot and cold water run to multiple rooms, with clinical hand-wash basins to infection-control specification, is qualifying plant and the associated cold-water system is an integral feature.
• Minor-ops and treatment rooms. Dedicated ventilation, clinical lighting, medical services and the fit-out of a minor-operations room carry a concentrated pool of plant and integral features.
• Cold-chain vaccine and pharmaceutical fridges. Temperature-controlled storage is functional plant used in the practice's activity, generally loose main-pool plant relieved through the AIA.
• Nurse and phlebotomy rooms. Treatment couches, dedicated wash, and the plumbing and electrical services that support blood-draw and nurse-led clinics.
• Clinical IT and networking. Server and comms provision, clinical networking and the powered infrastructure behind the practice's clinical systems qualify as plant.
• Disabled-access provision. Powered doors, platform lifts and hoists are qualifying plant; the incidental building alterations to install them can follow the plant. Purely structural access works are not plant and, if anything, sit in the Structures and Buildings Allowance.

We do not restate the five statutory integral-features categories here. The mechanics of what falls into the 6% special rate pool under section 33A are covered in full on our integral features capital allowances guide. What matters on a surgery is that a large share of the clinical spend is loose main-pool plant relievable through the AIA, and the fixed building services are special-rate integral features, and the two need separating by survey so each lands in the correct pool.

NHS notional rent and premises funding: what it does and does not do

NHS premises funding confuses many surgery claims. Under the Premises Costs Directions, a practice's occupation cost is supported through notional rent or rent reimbursement, and improvement grants can contribute to specific works. It is tempting to assume that because the NHS funds the premises, the practice has no capital allowances claim. That is the wrong conclusion.

Notional rent reimburses the cost of occupying the building. It does not, of itself, strip out capital allowances entitlement on fixtures the practice actually paid for. The question capital allowances asks is who bore the capital cost of the fixtures. Where a developer funded the clinical fit-out and recovers that cost through a rent the NHS then reimburses, the developer generally holds the fixtures claim, because the developer incurred the expenditure. Where the GP partnership funded its own fit-out, improvements or a later refurbishment from partnership capital, the partnership can claim on that spend, and the fact that the rent is NHS-reimbursed does not change it. Improvement grants that specifically meet the cost of qualifying works can reduce the expenditure treated as incurred, so grant-funded elements need isolating. The practical task is tracing each tranche of fit-out spend to who paid for it, net of any grant, and that trace is what a specialist survey documents.

Buying, leasing or already occupying: three entitlement routes

How a surgery claim is secured depends on how the practice holds the premises.

Buying the freehold. On a second-hand purchase, the fixtures pooling requirement and a section 198 election, explained in HMRC's Capital Allowances Manual at CA26470, govern whether the buyer can claim on fixtures the seller could have claimed. If the seller pooled the fixtures and no election is agreed, the buyer's claim on those fixtures can be lost. This is the same trap that catches every second-hand commercial purchase, covered in our embedded capital allowances on commercial property sub-hub. Raise it during conveyancing.

Taking a lease from a developer. As set out above, the developer usually holds the entitlement on the fit-out it funded, and the section 198 election at grant of lease is where the value is fixed and passed. A lease taken for a premium is the point of transfer; deal with it there or not at all.

Already occupying premises you fitted out. A practice that funded its own fit-out and never pooled the fixtures can usually bring that historic expenditure into a claim now, with writing-down allowances running from the current period. There is no general time limit on identifying qualifying expenditure still held in the business. A retrospective survey of a surgery the partnership fitted out years ago is one of the most common wins, because the spend was capitalised, treated as building cost, and never analysed for allowances.

The 2026/27 reliefs that apply to a surgery claim

Which first-year relief a surgery can use turns on whether the practice is a partnership or a company, and whether the plant is new or second-hand.

• Annual Investment Allowance (£1,000,000, permanent). Available to a GP partnership and a doctor-owned company alike. It gives a 100% deduction on qualifying plant and integral features up to the cap, and for most single-surgery fit-outs it covers the whole loose-plant and special-rate spend in the year incurred. This is the workhorse relief for a partnership.
• Full expensing (100%) and 50% first-year allowance. Companies only. A doctor-owned company can take a 100% first-year deduction on new and unused main-rate plant, and 50% on new and unused special-rate integral features. A partnership cannot use these. Second-hand fixtures acquired with a building do not qualify for full expensing but can still go through the AIA and the pools.
• New 40% first-year allowance (from 1 January 2026). Available to both companies and unincorporated businesses on new and unused main-rate plant. It matters most for an unincorporated practice whose new-plant spend runs above the £1,000,000 AIA cap, since a partnership cannot use full expensing. It does not apply to second-hand plant.
• Writing-down allowances. Anything not relieved up front is written down: the main pool at 14% from April 2026 (reduced from 18% by Finance Act 2026 section 28), and the special rate pool at 6%. A period straddling the April 2026 change uses a hybrid apportioned main-pool rate.
• Structures and Buildings Allowance (3% straight-line). The non-qualifying structure of a newly built or renovated surgery can attract SBA, claimed separately with an allowance statement, never on the same expenditure as the plant.

For a single-surgery fit-out inside the £1,000,000 AIA cap, the partnership-versus-company distinction rarely changes the year-one outcome, because the AIA already delivers full relief. It bites on larger multi-site programmes, where a company's full expensing and a partnership's 40% allowance and AIA planning start to diverge.

How a specialist survey works and what it costs

A defensible surgery claim is surveyor-led. A specialist capital-allowances firm inspects the premises, allocates the building and fit-out cost between qualifying plant, integral features and non-qualifying structure on a just and reasonable basis, values the pool, and confirms the entitlement position created by the lease and any elections. That valuation is what supports the figures on the return and what stands up if HMRC asks. A general accountant files the numbers; the survey is what makes them defensible.

Reputable specialists work on a contingent, no-claim, no-fee basis, so establishing what a practice can recover costs nothing up front. Because the entitlement question on a surgery is decided at the lease, the highest-value time to involve a specialist is before signing, when the section 198 election can still be secured. The second-best time is now, for any surgery the partnership has already fitted out and never analysed. A review confirms whether there is a claim, who holds it, and what it is worth.

To be clear on scope: this is unregulated specialist tax work. It is not investment or insurance advice, and we do not offer fee-protection or tax-investigation insurance. We route practices to a specialist capital-allowances firm, never a general accountant, and never to an insurance product.