Hotels are particularly suited to a Capital Allowances Claim

As a rule Hotels are one of the most suited types of commercial property when it comes to making a claim for capital allowances. In this post we briefly state why this is the case.

Hotels Contain Plant

Hotels are rich in “Plant” which qualifies for capital allowances under the general “Fixtures” rules within the Capital Allowances Act 2001.  Some of these fixtures include:-

  • Lifts
  • Air-conditioning
  • Heating
  • Sanitary equipment including toilets, baths and showers
  • Signs
  • Fire detection equipment
  • Hot & cold water systems
  • Wi-fi and telecommunication systems

Additional Plant

In addition to many of the common items found in other commercial property hotels contain items which are not commonly found in other buildings. Some of these include:-

  • Swimming Pools
  • Gymnasium Equipment
  • Laundry Equipment
  • Reception Desks & Bars

Items Creating Ambience

In addition to all of the above and more besides capital allowances are allowable on many items which create ambience. That these are allowable is as a result of a legal case of IRC v Scottish & Newcastle Breweries Ltd (1982) 55 TC 252. This means that items such as works of art, ornaments and bric-a-brac may normally be allowable for capital allowances purposes.

These items may also be allowable in other buildings where ambience is created for the benefit of customers such as Restaurants & Public Houses. However they would not be allowable in other commercial buildings  such as Offices.

Making a Capital Allowances Claim

As a general rule the level of capital allowances claimable for a hotel will fall between 20% to 30% of the original purchase price of the property. Although if an extensive development or refurbishment work has been undertaken this percentage can increase dramatically when the costs of purchase and refurbishment are added together. Also luxury hotels may attract a higher percentage because of both the quality & quantity of eligible fixtures.

If you own a hotel or hotels (or you have clients who do) then please contact us for a free high level review.