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Capital Allowances. Could this really save you a fortune in tax? Probably not in a majority of cases….. There are a number of companies out there claiming they can get huge tax rebates by surveying your hotel premises and adjusting the balance sheet to show an increased value of assets on which Capital Allowances can be made. They check over your hotel premises and note down estimated costs of stuff in the building such as water supplies and sanitary fittings. It sounds too good to be true and you know what they say about offers which sound so good! They probably are too good to be true. Well this could be one such offer and Hotel and Blackpool B&B owners need to make themselves aware as to why. I have been told that some sales agents claim they have already got £40,000 tax back for a hotel just down the street. This amounts to about £200,000 in profit spread over a few years – just how many hoteliers and smaller B&B owners have made that sort of profit recently in Blackpool? Not many I will wager! Points to consider: 1. If since you took over the business you have paid little or no tax you will probably not get a penny back! 2. Changes to the valuation of your assets in your tax return (bricks and mortar, goodwill, and fixtures and fittings/plant and machinery) could lead to some interest from the nice gentleman from Her Majesties Customs and Excise. This is not really a good idea where the potential benefit is only likely to be a few quid, but may be worth exploring if the potential tax rebates are £1,000’s. 3. Savings in some types of tax – income tax for example could lead to increases in other types of tax. Capital Gains tax is such an example. 4. Reducing the bricks and mortar (freehold) valuation of the business could worry those who have lent against the value of those bricks and mortar (mortgage valuation)and or work against someone hoping to raise money against the asset to purchase it in the future. This is not to say this should not be considered simply that accommodation providers need to weigh up the pro’s and cons and seek the advice of their qualified accountant before taking any steps. If you do decide to ahead then choose a ‘no win no fee’ to do the survey, but be very careful of companies who offer ‘no report no fee’.
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tax, capital allowances, blackpool, hotels, hoteliers, bed and breakfast, b&b,
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