Why offices hold a moderate but frequently overlooked pool
Offices sit in the middle of the capital allowances range. A hotel or a care home might carry 25% to 40% of its value in qualifying plant, because every bedroom repeats sanitaryware and specialist services. An office carries less. As a rule of thumb, roughly 15% to 25% of an office fit-out or second-hand purchase price qualifies for plant and machinery allowances, with the rest being structure and general finishes that attract only the 3% Structures and Buildings Allowance, if anything at all.
That moderate percentage is exactly why office claims get missed. The value is not obvious. There is no dramatic piece of plant on the completion statement, just a finished floor that looks like part of the building. Yet a surprising amount of an office is qualifying plant hidden in the fabric: the comfort cooling overhead, the void under the raised floor, the cabling in the risers, the lift, the access control on every door. On a fit-out running into six or seven figures, 15% to 25% is real money left on the table if nobody surveys it.
This page is the applied, office-specific view: what qualifies, what a claim is worth, and the question that makes offices different from every other sector, which is who actually holds the claim once a building is let. For the underlying statute mechanics of how integral features are defined and pooled, the detailed walk-through lives on our integral features capital allowances guide, and the buying-side due diligence sits on the embedded capital allowances sub-hub. This page does not repeat that ground.
The office plant and integral features that drive the claim
An office claim is built from a fairly consistent shortlist. Knowing the list is the first step to spotting how much a given building is likely to hold.
- Comfort cooling and air conditioning. Usually the single largest item. A powered system of ventilation, air cooling or air purification is an integral feature under section 33A of the Capital Allowances Act 2001, so it goes into the special rate pool at 6% (or is covered by the Annual Investment Allowance). This includes the chillers, fan coil units, ductwork and controls.
- Raised access flooring. Where the floor void forms part of an electrical or air-handling system, which is normal in a modern office, the raised floor is an integral feature. A bare structural void carrying nothing may not qualify, so function decides treatment, not the label.
- Data cabling and comms rooms. Structured cabling is main pool plant. A dedicated comms or server room concentrates qualifying spend in a small area through its cooling, power distribution and fire suppression.
- Suspended-ceiling lighting. The lighting installation is part of the electrical system and qualifies as an integral feature. The ceiling grid itself is usually setting, so the two are separated.
- Security and access control. Door entry, access-control readers, CCTV and intruder alarms are plant.
- Kitchenettes and breakout areas. The sink units, hot and cold water, extract and the connections serving them qualify. General worktops and cupboards that are part of the premises may not.
- Lifts. A passenger lift is expressly an integral feature under section 33A and goes into the special rate pool.
The recurring theme is that most of the value lands in the special rate pool (comfort cooling, qualifying raised floors, lighting, lifts) rather than the main pool. That matters for the relief route, because the special rate pool writes down at just 6%, so accelerating the deduction with the Annual Investment Allowance or, for a company, the 50% first-year allowance is usually the priority.
What a typical office claim is worth: the £1m Cat-B fit-out
Take a tenant taking a new floor and spending £1,000,000 on its own Cat-B fit-out. This is not a base building; it is the occupier's specification laid on top of the landlord's shell. On an office fit-out of this kind, a specialist would commonly identify around 20% of the spend as qualifying plant and integral features, so roughly £200,000 of pool.
The two items doing the heavy lifting are almost always the same. The raised access floor serving power and air, and the additional comfort cooling installed to suit the tenant's layout, together often account for well over half of the qualifying value, both landing in the special rate pool. Add the tenant's data cabling (main pool), feature and task lighting, access control, and the kitchenette services, and the £200,000 pool takes shape.
For a company incurring that spend, the relief is fast. The Annual Investment Allowance covers up to £1,000,000 of qualifying plant and integral features at 100% in the year, so the whole £200,000 can usually be relieved immediately, worth £50,000 in corporation tax at 25%. A company could alternatively use full expensing (100% first-year relief on new and unused main rate plant) and the 50% first-year allowance on the new special rate items, but for a claim inside the £1m cap the AIA is the simplest route to the same 100%. An unincorporated business gets the same 100% through the AIA up to the cap.
Cat-A versus Cat-B: who actually holds the claim
Here is the question that sets offices apart from warehouses, hotels or shops. In most sectors the owner-occupier or investor incurs the fit-out spend and claims on it, and the only real complication is a second-hand purchase. An office is different because the same building is routinely fitted out twice, by two different parties, and only one of them can claim any given item.
Cat-A is the landlord's base specification. It is a finished but unoccupied floor: raised access flooring, suspended ceilings, base comfort cooling, base lighting, and finished common parts and toilets, ready to let. The landlord pays for it and, as the person incurring the expenditure, the landlord generally claims the allowances on the Cat-A plant.
Cat-B is the tenant's fit-out on top: reception, meeting rooms and partitioning, extra cooling to suit the plan, feature lighting, kitchenettes, branding and the tenant's data cabling. The tenant pays for it and generally claims on it. So far, so tidy: each party claims what it paid for.
The complication arrives with two things that are common in office deals: fixtures already in the building when a lease is granted, and money passing between the parties.
| Situation | Who is treated as owning the fixtures / who can claim |
|---|---|
| Landlord installs and pays for Cat-A, keeps it on grant of the lease | Landlord claims on the Cat-A plant it incurred |
| Tenant installs and pays for its own Cat-B fit-out | Tenant claims on the Cat-B plant it incurred |
| Lease granted over a building the landlord already claimed on; tenant is the incoming lessee | Section 183 governs the incoming lessee where the lessor was entitled to allowances; the fixtures do not simply transfer, and an election may fix the value |
| Landlord was not entitled to allowances on the existing fixtures (for example, a prior person's expenditure) | Section 184 governs the incoming lessee where the lessor was not entitled, changing who can bring the fixtures into a pool |
| Landlord pays a contribution towards the tenant's Cat-B fit-out (a fit-out contribution or reverse premium applied to works) | The party who effectively bore the cost is the one who can claim; a contribution can move the entitlement, so the payment terms must be read carefully |
The load-bearing point is that sections 183 and 184 of the Capital Allowances Act 2001 decide who is treated as the owner of fixtures when a lease is granted over a building that already contains them. They are the reason two parties cannot both claim the same comfort cooling or the same raised floor. When a landlord grants a lease of a fitted floor, or pays a contribution to a tenant's works, the entitlement to the fixtures allowances is not automatic and is not always where you would expect it to be. Getting this wrong means either a double claim that fails on enquiry, or a valuable claim that neither party makes because each assumed the other had it.
Two practical rules fall out of this. First, whenever a lease is granted over a fitted office, the fixtures position should be pinned down in the documents, ideally with an election, rather than left to be argued later. Second, wherever a fit-out contribution passes between landlord and tenant, the capital allowances entitlement should be decided as part of the commercial terms, because the contribution can determine who bore the cost and therefore who claims.
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Buying an office versus fitting one out you already occupy
The route to a claim depends on how you came to the plant.
If you are fitting out a floor you occupy, whether as owner or tenant, you incur fresh expenditure and the claim is a straightforward matter of identifying the qualifying proportion of your spend, allocating it between the main and special rate pools, and choosing the relief. New plant means the full first-year reliefs are in play for the party that pays.
If you are buying a second-hand office as an investment or to occupy, the value is in the fixtures the previous owner installed but may never have claimed on. That is a due diligence exercise, and it turns on two hurdles introduced from April 2014: the pooling requirement (section 187A), under which the past owner must have allocated the fixtures to a pool, and a fixed-value requirement usually met by a joint section 198 election. If the seller pooled the fixtures and no election is agreed, or the seller was entitled and never pooled, the buyer can lose the entitlement altogether. On an office purchase, the qualifying fixtures are again the comfort cooling, lifts, raised floors and cabling, and a just and reasonable apportionment under section 562 isolates the value. This is the same purchase-side discipline covered on the embedded capital allowances sub-hub, applied to office fixtures.
A retrospective claim on an office you already own is often still possible, provided the fixtures have not been the subject of a disposal that closed the entitlement. There is no time limit on identifying historic qualifying expenditure that has never been pooled, so an office bought years ago and never surveyed frequently still holds an unclaimed pool.
How offices compare, and where the value really sits
It helps to place offices against the sector next door. A modern office and an industrial unit can cost similar money, but their claims look very different. The industrial shell is mostly structure with a low embedded percentage, and its qualifying items (cranes, dock levellers, three-phase power) skew towards the main pool. An office is the reverse: a higher embedded percentage driven by comfort cooling, raised floors and lighting, most of which lands in the special rate pool. If you own both, the surveys and the pool allocations are genuinely different exercises, which is why sector-specific analysis matters rather than a single flat percentage.
Within an office itself, the concentration points are worth knowing before a survey. The plant floor or roof-level chillers and air-handling units, the comms room, the lift, and the raised-floor voids are where the density is. General open-plan carpet, plasterboard partitions and painted finishes are largely non-qualifying. A specialist targets the dense pockets first, because that is where the 15% to 25% actually comes from.
How a specialist survey works and what it costs you
An office capital allowances claim is a surveying job, not a bookkeeping one. Valuing comfort cooling, apportioning a raised floor between qualifying services and structure, and preparing a just and reasonable apportionment that will hold up on enquiry are quantity-surveying disciplines. That is why the work is done by a specialist surveyor-led fixtures firm rather than a general accountant, who is well placed to file the claim but not to build the underlying valuation.
A typical engagement starts with a short feasibility check: the building type, the spend or purchase price, whether anyone claimed before, and the ownership vehicle, which is usually enough to say whether a claim is worthwhile. If it is, the specialist surveys the property, allocates the qualifying expenditure between the main and special rate pools, resolves the Cat-A and Cat-B or section 198 position, and produces a report the accountant uses to make the claim. The fee is normally contingent on the qualifying expenditure identified, so there is generally no up-front cost and no fee if there is nothing to find.
Before you commit, our capital allowances calculator gives an indicative range for your office based on its type and spend. It is an estimate only; a survey confirms the real figure. When you are ready, the enquiry form below routes you to a specialist capital allowances firm for a free, no-obligation review.