Capital Allowances for Cafes and Restaurants
2020 will not go down in history as a good year in the restaurant trade.
No covers until July? Social distancing meaning 75% less bookings or walk-ins? A new requirement to make your premises “COVID secure” means money needed for investment at the worst possible time? This is the new normal.
That’s why it is vital that you make use of all the reliefs, allowances and refunds available to you now. Within the fixtures and fittings of your property, there are capital allowances waiting to make or save you money
What are Capital Allowances?
Capital Allowances are a tax relief designed to incentivise business owners like you to improve their commercial properties. They have been around for decades and are a well-recognised part of the UK tax landscape. They are allowances that provide relief to tax for expenditure incurred improving a commercial property. Any item of expenditure which has an “enduring benefit” to the business can qualify for relief. From Gazebos to Garden Equipment to Grab Rails, you will be surprised at what can qualify for relief.
Within a commercial property valued at £750,000, there may be as much as £240,000 in unclaimed Capital Allowances. For a property owned by an individual that equates to a tax refund or future saving of as much as £96,000.
Cafes and Restaurants contain numerous items which may qualify as claimable under the Capital Allowances Act 2001:
Signage
Bars
Emergency Lighting and Fire Detection Equipment
Fittings in Toilets
Heating and Ventilation Systems
Air Conditioning
Kitchen Fittings and Catering Equipment
Hot and Cold-Water Systems
Electrical Systems
Stair Fittings
Suspended Ceilings and Partitioning
Entry and Exit Systems
There are also items which create ambience and atmosphere in pub Cafes and Restaurants which are claimable. These items fulfil a valuable function in creating an environment in which customers enjoy spending time in and thus create value and drive revenue.
These items are not on a defined list in the relevant legislation but have instead been found through case law such as IRC v Scottish & Newcastle Breweries Ltd (1982) 55 TC 252.
Relevant items might include:
Art
Ornaments
Wall Plaques
Sculptures
Tapestries
How do I claim?
The first stage is to book an initial consultation which we can do in-person or online. We don’t do the hard sell; we just want to know as much as we can in order to help you as much as we can. We then speak to your accountant to gather some more information and then arrange for a surveyor to visit your commercial property. They gather information about the claimable items in the property and send that to a tax accountant to write a report which is sent to HMRC. Your claim is collected and sent to you less our success fee. The fee is 5.5% of the allowances that we identify for you. The process usually takes 8 to 12 weeks.
How do I get started?
Just contact us however you feel most comfortable and we will be in touch to get the ball rolling.
This advice was supplied by Rufus & George
