The majority of hospitality and catering businesses in the UK could be owed thousands of pounds in overpaid tax due to unclaimed tax relief relating to their premises, according to a review* carried out by property tax specialists MoneyBee Tax.
The unclaimed tax relief, so-called capital allowances, applies to expenditure incurred on buying, building or refurbishing premises, relating specifically to the fixtures and fittings within the building. These capital allowances are often the most significant and effective tax relief that can be used to reduce the business owner’s tax liability.
Many businesses successfully claim capital allowances for items such as furniture, bar fixtures and catering equipment within their tax return every year. However, items that are often overlooked that attract significant capital allowances include ‘ambience creators’ such as décor items like artwork, plants and even Christmas decorations, as well as items inherent within the building such as audio visual equipment, heating, ventilation and lighting systems.
These tax allowances can be very valuable for a business within the hospitality sector, with anything between 20% and 95% of property expenditure qualifying for capital allowances. For example, a client recently purchased a ‘shell’ premises before fitting out as a deli bar. After a detailed review, 20% of the property acquisition costs and 88% of the fitting out costs qualified for capital allowances, yielding significant tax savings for the owner.
Andrew Reid of MoneyBeeTax says:
‘The value of capital allowances will vary from business to business but we rarely come across a case where a business couldn’t save money. To give an example, if a restaurant spent £100k on fitting out premises, you could be claiming capital allowances of up to £90k, potentially giving a tax rebate of £36k. Importantly, even if you incurred expenditure on your premises years ago, a claim for capital allowances can still be made.’
To find out if you could be due a tax rebate visit MoneyBeeTax and check out the capital allowances calculator to get an immediate estimate of how much you could be owed.
*The review looked at a sample of over 2000 engagements with MoneyBeeTax’s parent company Capitus Group. In almost 100% of cases, unused capital allowances were identified which resulted in a reduction of the clients tax liability.
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Andrew Reid
028 2564 7022 or 0844 8099 233
Nick Small
028 2564 7022 or 0844 8099 233