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Furnished Holiday Lets – HMRC Clarify Legislation

The window to claim Capital Allowances tax relief on furnished holiday lettings (FHLs) is fast decreasing before repeal of the legislation in April 2025 and HMRC have now clarified the transitional rules about who can or can't claim.

07 Nov 2024

Written by: David Gibson

New Case Law – Capital v Revenue

A recent important Supreme Court decision in Centrica Overseas Holdings Limited v HMRC addresses the deductibility of expenses incurred by a company. The bar to dedeuct costs has been raised considerably

04 Oct 2024

Written by: David Gibson

HMRC To Increase Scrutiny on Capital Allowances Claims

Not only are Allowances more advantageous than ever before, but HMRC are strategically targeting tax leakage – including through Capital Allowances. Getting the correct advice is essential

04 Oct 2024

Written by: Russell Bennett

Archive

 

Latest News

Furnished Holiday Lets – HMRC Clarify Legislation

07 Nov 2024

The window to claim Capital Allowances tax relief on furnished holiday lettings (FHLs) is fast decreasing before repeal of the legislation in April 2025 and HMRC have now clarified the transitional rules about who can or can't claim.

New Case Law – Capital v Revenue

04 Oct 2024

A recent important Supreme Court decision in Centrica Overseas Holdings Limited v HMRC addresses the deductibility of expenses incurred by a company. The bar to dedeuct costs has been raised considerably

HMRC To Increase Scrutiny on Capital Allowances Claims

04 Oct 2024

Not only are Allowances more advantageous than ever before, but HMRC are strategically targeting tax leakage – including through Capital Allowances. Getting the correct advice is essential

100% Full Expensing – What is it and why it’s important

09 Sep 2024

Hailed as the “Greatest Tax Break in History” when it was introduced in 2021, the 130% Super Deduction aimed to take some of the sting away from the hike in Corporation Tax rate that was announced in the same speech. Its replacement, Full Expensing (FE), took over in April 2023 as a slightly less headline-grabby 100% First Year Allowance. But what is it?

Some Good News for Furnished Holiday Let Owners

05 Aug 2024

Positive transitional rules have now been published allowing Furnished Holiday Let owners the ability to use Capital Allowances beyond April 2025

Case Ruling – HMRC v Altrad Services Limited

10 Jul 2024

The decision by the Court of Appeal will have far reaching implications in that it clearly resets the boundaries of what is a capital allowances avoidance scheme designed to increase the quantum of capital allowances claimed

Spring Budget Update

06 Mar 2024

Chancellor Jeremey Hunt announces changes to the capital allowances legislation affecting furnished holiday let owners

Capital v Revenue – Understand The Risks v Benefit

24 Jan 2024

As we are fast approaching the self assessment filing deadline for individuals and the amendment window for corporate entities with a year end of March, understanding the importance of what constitutes capital or revenue expenditure, and the risks and benefits associated with it, is extremely important.

First Year Allowances for Corporate Members of Partnerships

19 Jan 2024

In a positive move HMRC have updated their capital allowances guidance for partnerships stating that partnerships with underlying corporate partners can claim first year allowances

1. Assist Meeting Reporting Deadlines

  • Accountants are seemingly busier than ever and often do not receive notification of building works having been undertaken by clients, or the detail of such works, until just before tax returns are required to be submitted.
  • We can work alongside client’s advisors providing Capital Allowances advice ensuring the client has maximised its full tax savings including the 130% super deduction which ends March 2023; there still remains time to review expenditure incurred over the past two years. 

2. Reduce Risk – Capitalised Expenditure v Profit & Loss

  • Many clients write-off 100% of their construction expenditure to the P&L and not as capital, overstating the revenue position and increasing the chance of an HMRC enquiry.
  • GAAP requirements mean that building projects and associated professional fees must be capitalised where there are any works capital in nature as outlined in the HMRC manual https://www.gov.uk/hmrc-internal-manuals/business-income-manual/bim42215
3. Reduce Risk – Typical Errors Giving Rise to HMRC Enquiry
  • Structures & Buildings Allowances (SBAs) – Failure to evidence contract and first use dates of all building contracts and incorrectly claiming SBAs on items normally qualifying as plant and machinery or revenue deductions. he P&L and not as capital, overstating the revenue position and increasing the chance of an HMRC enquiry.
  • Capital Allowances Claims on Property Purchases – Failure to provide full residual land value calculations and instead use of ‘percentage of purchase price’ land values, or omit the HMRC apportionment multiplier completely.

4. Poor Construction Cost Information

  • Lack of detailed cost information to support invoices means accountants are missing capital allowances and allocating as non-qualifying expenditure in the tax computations. A capital allowances advisor with surveying and tax expertise will be able to value and breakdown this expenditure to claim capital allowances in a format acceptable to HMRC.

Action Points

Contact Veritas Advisory for advice on the following:

  • Cash Flow Forecasts, Capital Allowances Estimates & Claim Production
  • Technical Advice & Internal Capital Allowances CPD Sessions (no charge)