Capital Allowances for Hotels & Guest Houses
2020 will not go down in history as a good year for hospitality.
A drop in occupancy is bad. A new requirement to make your premises “COVID secure” means money needed for investment at the worst possible time. 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-recognized 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.
Hotels and Guest Houses contain numerous items that may qualify as claimable under the Capital Allowances Act 2001.
Signage
Swimming Pools
Gym Equipment
Spa Equipment
Laundry Equipment
Reception Desks
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
Lifts
Suspended Ceilings and Partitioning
There are also items that create ambience and atmosphere in public spaces such as bars, receptions, reading rooms and libraries which are claimable. These items fulfill 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 a consultation with one of our team which can be in person, over the phone or online. If we agree that it is likely you will be able to make a claim, then we will make an appointment for a specialist surveyor from our partner account firm to come and see the property. They will itemise every fixture and fitting which qualifies for an allowance and send the results to a tax accountant. They will prepare a report for your accountant to submit to HMRC. The process takes 8-12 weeks. You pay 5.5% of the allowances found and you only pay on success.
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
