Capital allowances for hotels
Commercial kitchens, lifts, guest bathrooms and the air conditioning in every room are plant under the Capital Allowances Act 2001. We find them, value them and claim them.
Whether you run a boutique guesthouse or a franchised hotel, the building you bought came with fixtures that qualify for tax relief. They sit inside the purchase price, unidentified, until a surveyor and a tax specialist separate them out. Most general accountants never do this, because it needs a site survey and a valuation as well as the tax knowledge.
We have done it for hundreds of hotels across the UK, including properties in the Marriott and Hilton groups. On average we identify around 32% of the original purchase price as qualifying expenditure. On a £1m hotel that is roughly £320,000 of allowances, worth about £128,000 in tax relief for a higher-rate taxpayer: money for refurbishment, staff training or the next acquisition.
The process typically takes six weeks from first conversation to relief from HMRC, and we deal with HMRC on your behalf. If we can’t identify previously unclaimed allowances, there is no fee.
What qualifies
Legislation that matters
The House of Lords accepted that murals, decorative light fittings and other items installed to create a hotel’s atmosphere were plant, because creating that setting is part of the trade. It is the reason a hotel survey goes beyond the boiler room.
Lifts, electrical and lighting systems, cold water, space and water heating, and air conditioning are integral features. They go into the special rate pool at 6% a year, unless the Annual Investment Allowance absorbs them first.
Since April 2014 a buyer can only claim fixtures if the seller pooled them and the value is fixed, usually by a joint s198 election within two years of completion. Bring us in before exchange and the contract protects your allowances.
The dwelling-house restriction that blocks allowances in residential lets does not apply to hotel bedrooms. That distinction became sharper when the furnished holiday let regime ended in April 2025.
Recent hotels claims
The UK’s leading capital allowance specialists
Embedded allowances need a property survey, a valuation and specialist tax knowledge. Most accountancy firms claim invoiced items such as furniture and computers, but don’t have the surveying resource to identify fixtures built into the fabric of a building.
Allowances are not deducted from the cost of the asset when calculating a gain (s41 TCGA 1992), so a claim cannot create or increase a chargeable gain. They can restrict a capital loss, and on a sale the s198 election decides what passes to the buyer, so plan it into the transaction.
Every claim is documented to stand up to scrutiny, and we support you throughout any HMRC enquiry. To date every report we have submitted has been approved.
No. If we can’t identify previously unclaimed allowances, there is no fee. Full fee terms are set out in our engagement letter.
Two minutes, no obligation, and no fee if we can’t identify previously unclaimed allowances.
