There has been a recent steep increase in the number of people seeking to badge their property activity as one of providing “Serviced Accommodation”.
It appears that calling the property activity “Serviced Accommodation” may be being used to sidestep the capital allowances restrictions applying to residential property or avoiding the sometimes-onerous conditions.
Simply put, “Serviced Accommodation” does not qualify as an activity for capital allowances purposes.
Ordinary property businesses, trades and furnished holiday lettings (FHL) can qualify, subject to the provisions of the Capital Allowances Act 2001.
Any claim for “Serviced Accommodation” must pass the ‘occupancy plus services’ test.
Landlord must be in occupation.
Must provide services (offering breakfast or changing the sheets is not enough).
Case Law history, legislation and guidance is really not on the side of “Serviced Accommodation” claimants.
Claiming capital allowances for “Serviced Accommodation” thus may be a high-risk strategy.
To prevent penalties or a future discovery assessment, claimants are well advised to disclose the facts openly to HMRC.
