Capital Allowances and Pubs
Pub Capital Allowances relates to the money you spend on building, refurbishing, or buying your pub. When you spend money on your pub building, it creates a benefit to your business as your pub is your business. This makes the money you have spent subject to tax relief through a Capital Allowance claim.
By identifying the Capital Allowances within your pub, you can make a claim to lower your tax bill, and possibly even receive a refund from HMRC on previous tax years.
Capital Allowances within a Pub
Your pub is run with the purpose of serving drink, and sometimes food to customers in an environment they feel welcome. To perform this service, the majority of the pub property is therefore used to conduct the business.
But what does it mean to you as a pub owner?
When you built, refurbished, or bought your pub it will have had certain fixtures and fittings integrated into it. These can be claimed under Capital Allowances, as these fixtures and fittings are integral to the fabric of the building and allow it to function for the purpose of your business.
Consider if you have any of the following, as they can all be claimed under your pub Capital Allowances:
- heating systems
- hot & cold water systems
- electrical systems
- sanitary ware
- kitchen equipment
Plus more that only a Capital Allowance specialist would be able to identify!
Benefit of Pub Capital Allowances
Capital Allowances identified in your pub can provide you with substantial tax relief, greater than you may find anywhere else.
This tax relief will be applied against your taxable profits, allowing you to ease your tax burden and spend more on developing your business.
What if the pub has already claimed Capital Allowances?
While there are pubs that have already claimed their full Capital Allowances, it is not a common occurrence.
But when we do find one, we first look to see if they have made a claim before 2008, or if the new owner had since refurbished the property. If either of those are the case then a new claim may still be made.
Of course you may believe that you have already claimed Capital Allowances, or you have already submitted expenses based on the fixtures and fittings within your property. If you haven’t had a full survey conducted of your pub by a Capital Allowance specialist than in all likeness you fall within the 90% of pub owners that haven’t claimed.
Capital Allowances are a niche area of accountancy that few truly understand. You cannot expect your accountant to be fully versed in every aspect of accountancy, and we offer an add-on service to them and you to ensure you can claim your full tax relief.
Breaking down Pub Capital Allowances
Typically you would expect a Capital Allowances report to identify approximately 25% of the property’s purchase price as Capital Allowances (dependent on a number of variables such as if you had refurbished the property etc).
For illustrations purpose, assuming you purchased your pub for £450,000 you would expect to see Capital Allowances identified in your pub worth £112,500. This amount is then applied against your marginal rate of tax to provide you with tax relief.
Engage Commercial Properties Tax for no obligation, Free Audit / Review of your property to determine if you can claim.