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Browsing Posts in Tax Benefits for Hospitality Industry

URGENT  EARLY  WARNING RETROSPECTIVE  CAPITAL  ALLOWANCE  CLAIMS WILL  SOON  BE  TIME-BARRED

Buried within the 240 pages of the HM Revenue & Customs “Overview of Tax Legislation & Rates” dated 23.03.2011 (Budget Day) we have discovered the following little bombshell, which has very large and negative consequences:-

Paragraph 3.59 Capital Allowances:- Fixtures Mandatory Pooling

“The Government will consult on plans to introduce changes to the capital allowances Fixtures rules that businesses must pool their expenditure on Fixtures in a building within a short period of acquiring the building, in order to qualify for capital allowances.  A consultation document will be published at the end of May.”

At this stage we have no knowledge of what the Revenue believe to be “a short period” but it seems logical that they will start the ball rolling at two years (being the normal CT/600 amendment window); if so it will be the duty of every tax advisor to write and try to have the proposed time-bar extended (at least in the initial years).

Based on experience to date of such “HMR&C – Consultative Documents” we must assume that legislation will be introduced to limit retrospective capital allowance claims, probably from April 2012 (possibly earlier) – the unknown factor being what will the time limit be – and this is likely to be the only negotiable point in the Consultation.

There will be some tax advisors who read the above and say – “so what” – well here is a “what”  – Once a specific time-bar is in place if the advisor has failed to advise their client (in writing) of the implications, prior to the legislation becoming operative, then they face a very real possibility of a Professional Negligence Claim being made against them, if that client could have had a potential retrospective capital allowance claim outside of that time-bar.

The moral is you have been warned – now is the time to be checking all of your client files to see if they hold substantial freehold / long leasehold properties or indeed capitalized tenant’s improvements, which may well contain embedded Fixtures within the building, that could qualify for a retrospective capital allowance claim.

It should be noted that Contracts of Purchase often refer to an inventory of – Fixtures & Fittings / Chattles / Plant & Machinery – which will usually have been brought into the purchaser’s computation as an opening capital allowance pool balance but, it is much rarer to find reference to Fixtures within the contract, especially in the absence of a Section 198 CCA 2001 Election. In such cases it will usually require the expertise of a proven, specialist, capital allowance company to identify and value the embedded qualifying fixtures – we are that company.

This limit has largely gone unnoticed by many, and will almost certainly see many claimants who were originally entitled to take advantage of  these lucrative tax benefits missing out.  Salmon Business Group are now strongly urging everyone who we have already contacted regarding their claim to really sit up and take action NOW, or stand to lose £1000’s in tax rebates.

For further information regarding your Capital Allowance claim, please contact one of our Capital Allowance specialists to get your claim underway.

Telephone us now on 0114 293011, Alternatively email us on sales@salmon-business.com

Tax Benefits for Hotel and Guest House Owners

Tax Benefits for Hotel and Guest House Owners

Are You One of The Few Hotel Owners Who Haven’t Made Their Capital Allowance Claim?

Discover how your Hotel and Guest House hold the keys to unlocking £1000’s in overpaid taxes.

The results of making a Capital Allowance claim on your Hotel or Guest House will vastly reduce the amount of tax you pay on any profits you post in future years. In the majority of cases providing you have made a profit in the previous 2 years, a Hotel or Guest House will receive a lump sum of any overpaid taxes they have made.

Capital Allowances are a tax payers right! It is not an avoidance strategy.

It is estimated that 20-40% of a hotel’s fit out costs could qualify for capital allowances.  However, as of April 2012 these refunds will be reduced greatly as the tax system is being simplified and complex claims are going to be abolished.

The reference says the Conservatives aim to cut the headline rate of corporation tax to 25p and small company rate to 20p funded by reducing complex tax relief’s and allowances. –see http://www.conservatives.com/Policy/Where_we_stand/Business.aspx second point on their priority list!

Don’t miss out on these valuable tax advantages whilst they are still available to you – speak with an adviser today and arrange a FREE site survey NOW.

Your Capital Allowance pool can be locked in now and not drawn down until you need it.
REMEMBER THE CLAIM POOL WILL BE REDUCED IN 2012 SO BEST ACT NOW TO RECEIVE FULL BENEFITS.

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Contact Salmon Business Group today on 01246 293011
Alternatively, visit us at www.salmon-business.com

Capital Allowances

Capital Allowances

How Much is a Typical Capital Allowance Claim Worth?

Whilst every case is different, and each sector has its own expectations, as an average we would hope to identify additional capital allowances of some 20% – 35% of the freehold cost.

Below are some typical examples and amounts we have successfully processed.

benefits
OFFICES:
A claim in excess of £146,000.00 was acheived.
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benefits
CARE HOME:
A claim in excess of £374,000.00 was acheived.
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benefits
HOLIDAY PARK:
A claim in excess of £360,000.00 was acheived.
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benefits
CARAVAN PARK :
A claim to date for a single park was £1.8 Million
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benefits
HOTEL:
A claim in excess of £169,000.00 was acheived regarding an extension to the hotel. Our largest Hotel claim to date is £2.7 Million.
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benefits
DAY CARE NURSERIES:
A claim in excess of £62,000.00 was acheived.
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benefits
HOLIDAY COTTAGES:
A claim in excess of £126,000.00 was acheived. Our largest claim to date in this sector was £196,000.00
We will quickly identify the validity of a claim without obligation. If a claim does not proceed there will be no fee.

Your next step

To get a more accurate figure as to the amount you are entitled to please contact one of our Capital Allowance specialists where we can arrange a suitable time to visit you.

Call 01246 293011

Your next step
To get a more accurate figure as to the amount you are entitled to please contact one of our Capital Allowance specialists where we can arrange a suitable time to visit you.
Call 01246 293011
Government will cut capital allowance rates from April 2012

Government will cut capital allowance rates from April 2012

Reduction in Capital Allowances

Hospitality businesses that are planning to spend more than £25,000 on plant and machinery are strongly advised to do so before April 2012 when the annual investment allowance will drop from £100,000 to £25,000.

The Institute of Hospitality are now strongly urging their members to lock in their Capital Allowance claims now,  and have issued the following statement on their web site.

In his inaugural Budget the Chancellor announced a reduction in the headline rate of corporation tax. The aim is to reduce the main rate from 28% to 24% by 2014 through annual cuts of 1% beginning on 1 April 2011.

Although this will help operators save and/or invest, the Chancellor is balancing the books by reducing the rate of capital allowances, which are effectively tax breaks that businesses receive in respect of expenditure on plant and machinery.

It is estimated that 20-40% of a hotel’s cost and 50-90% of a restaurant’s fit-out costs could qualify for capital allowances. So the cut in capital allowances represents a potentially sizeable increase in tax for many hospitality businesses.

Businesses are currently allowed to deduct the full cost of the first £100,000 of expenditure against taxable profits. From 1 April 2012 the Chancellor’s balancing act means only the first £25,000 will be allowed. In addition from 2012, any investment over and above £25,000 will now receive only a 18% tax deduction rather than the existing 20%. The allowances available on “integral features”, such as the cost incurred on electrical systems, cold water, heating and ventilation systems, and lifts, will also see their rate reduce in 2012 from 10% to 8%.

Although certain other expenditure on items such as certified “green” plant and machinery will still qualify for 100% first-year allowances, and the vast majority of hospitality businesses may not exceed the £25,000 annual allowance, businesses should carefully consider how and when to invest in plant and machinery to ensure they receive the optimum tax deduction. They need to look closely at whether the cost is a repair or a replacement, ensure contractors clearly identify each element of work carried out on their paperwork, and involve specialist advisers to ensure claims are maximised.

All Commercial property owners are strongly urged to make their capital allowance claim(s) as soon as possible, even if the amount of tax you have paid in the previous 2 years and expected amounts for this year are not very high, by locking in your claim now, you will still be eligible to benefit from the higher Capital Allowance rates of today.

For further information as to the possible potential claim you are entitled to, followed by your FREE site survey, please contact Salmon Business Group and speak with one of our Capital Allowance specialists.

Visit our web site: www.salmon-business.com, alternatively call us direct on 01246 293011.

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