A London based hotel group has had a windfall this month, as they have been able to claim millions of pounds in capital allowances across their hotel group, right when the industry has been experiencing one of its toughest 12 months on record.

The conglomerate, who asked to remain anonymous to retain their privacy, was able to make a capital allowance claim based upon embedded assets held within their buildings.

These items are considered part of the property that are eligible for tax relief, and typically include items such as elevators, climate control, commercial kitchens, security systems and other bespoke assets associated with hotel operations and management.

“We were referred to HMA Tax by a long-standing supplier, and when we discovered that we were sitting on upwards of 6 million pounds of allowances, we knew this was something we couldn’t ignore” – Stated the National Finance Manager

“The process was easy as the specialist knew exactly what they were doing. A phone call, zoom meeting and survey of our buildings and that was that, we were ready to claim and have received our first tax rebate from HMRC in a few weeks.”

Many across the hospitality and tourism industry in global cities such as London and Manchester are starting to become aware that they are able to make a capital allowance claim and could be sitting on millions of pounds of tax relief.

Andy Milnes, Senior Claims Specialist, explains:

“Embedded capital allowances claims remain one of the most under-utilised tax incentives for commercial property owners in the UK.

“With the high barriers of entry for commercial property ownership in the UK, Capital Allowance Act 2001 should always be considered when buying or selling commercial property. Fortunately claims can be made retrospectively, and typically produce a tax rebate, as well as ongoing relief”

In the case of commercial property, you need a specialist team to determine the qualifying items embedded in the property and an understanding of the complex tax rules surrounding this. All of those skills can be applied by a capital allowance expert.”

The amount that can be claimed would surprise some, for example, the typical claim would be around 40% of the original purchase price of the property, which represents £400k of allowances in a £1m property, translating a £125k tax refunds.

If you own a hotel it is likely that we can assist you in making a claim. Please call Andy Milnes on 01384 904090 or email andy@hma.tax for more information.