[DAYS_LEFT] days left of your Medeconomics free trial

Subscribe now

Your free trial has expired

Subscribe now to access Medeconomics

Business benefits for practices in Enterprise Zones

GPs with surgeries located in Enterprise Zones could find there are tax and other advantages for the practice, says Simon Gray

Enterprise Zones: business benefits
Enterprise Zones: business benefits

Enterprise Zones (EZs) were introduced in the early 1980s to encourage regeneration of rundown areas across the UK. There were numerous sites designated as EZs during the 1980s and early 1990s with the major incentive being tax breaks available to those who invested in EZs within 20 years of the site being designated as such.

The last EZ was due to ‘expire’ in the next year or so, but when the coalition government came to power they decided to reintroduce the EZ concept and since 2010 have designated over 30 new EZ sites in England, Scotland and Wales.

The benefits afforded a business that is situated in one of these ‘new’ EZs is:

  • Super fast broadband
  • Business rates discount
  • Simplified planning (through use of local development orders)
  • Tax breaks – enhanced capital allowances

Capital allowances
These are the tax equivalent of depreciation. In your surgery accounts there is a line in the profit and loss account for depreciation, which is meant to represent the erosion in value of the practice assets, such as equipment and fixture) over time. The write off policy (how many years for each asset class) is subjective and differs between practices.

When working out tax, HM Revenue and Customs (HMRC) tell us to ignore the depreciation line in the practice accounts and instead substitute it with a figure calculated in accordance with a very prescriptive set of their rules, known as capital allowances.

Until March 2012 the first £100,000 spend on capital equipment each year was subject to immediate tax relief in the year of purchase. Since April 2012 that limit has been reduced to £25,000; meaning that any yearly spend over £25,000 could take several years to obtain tax relief in full. 

Enhanced allowances
The ‘enhanced’ capital allowances rules that are available in some of the new EZs say that when you purchase capital equipment, regardless of how much it cost, the entire amount can be set off against tax in the year of purchase.

However bear in mind that of all the new EZs announced in the last couple of years, only six of them have been granted enhanced capital allowances status. For the remaining EZs, the ‘normal’ capital allowances rules apply, which means the new lower first year relief limit of £25,000.

If your practice is situated in an EZ, speak to your accountant to see if that EZ is one of the six that will also benefit from the enhanced capital allowances regime. If you are considering moving surgery premises, give some thought to the EZ benefits and see where the nearest ones are.

  • Simon Gray is a partner with Henton & Co LLP specialist medical accountants www.hentons.com
ENTERPRISE ZONES

 England

  • Black Country i54 and Darlaston
  • Cornwall and Isles of Scilly Newquay Aerohub
  • Derby, Derbyshire
  • Nottingham and Nottinghamshire Boots Campus
  • Greater Birmingham and Solihull City Centre
  • Greater Cambridge and Greater Peterborough Alconbury Airfield
  • Greater Manchester Airport
  • Humber Estuary Renewable Energy Super Cluster and Green Port Corridor
  • Humber Green Port Corridor
  • Lancashire
  • Leeds Lower Aire Valley
  • Leicester and Leicestershire Mira Technology Park
  • Liverpool Daresbury Science Campus
  • Liverpool Mersey Waters
  • London Royal Docks
  • New Anglia Great Yarmouth and Lowestoft
  • North Eastern River Tyne and Nissan Site
  • Oxfordshire Science Vale UK
  • Sheffield Modern Manufacturing and Technology Growth Area
  • Solent Daedalus Airfield
  • South East Midlands Northampton Waterside
  • South East Sandwich and Harlow
  • Tees Valley
  • The Marches Hereford
  • West of England Temple Quarter (Bristol)       

 

Wales

  • Cardiff (central business district)
  • Anglesey
  • Deeside
  • St Athan - Cardiff Airport
  • Ebbw Vale
  • Snowdonia Haven Waterway

 

Scotland

  • Nigg (Highland)
  • Dundee Port (Dundee City)
  • Dundee Claverhouse (Dundee City)
  • Irvine (N Ayrshire)






Have you registered with us yet?

Register now to enjoy more articles
and free email bulletins.

Sign up now
Already registered?
Sign in

Database of GP Fees



Latest Jobs