Furnished holiday let (FHL) capital allowances

Ordinary property businesses, trades and furnished holiday lets can qualify, subject to the provisions of the Capital Allowances Act 2001. In fact, a serviced accommodation business is more likely meant to be an FHL which has its own definition and qualifying conditions for tax relief (see HMRC help sheet HS252).  Furnished holiday let capital allowances qualifying conditions must be met and there are specific guidelines when acquiring the first FHL, acquiring in an existing business or switching status during or at the end of ownership. Other considerations must also be made to satisfy pooling and fixed value requirements. FHL must not be confused with serviced accommodation as serviced accommodation has no meaning under tax law and instead means a hotel or bed and breakfast or similar which is part of the leisure sector.

Trades and professions can be considered as being a qualifying activity for plant and machinery capital allowances, but the rules of the Capital Allowances Act 2001 are complex. A properly formulated capital allowances claim ensures the use of the tax reliefs as they were intended.

The potential for capital allowances has increased since 2008 with the introduction integral features but loss of allowances is very real without a capital allowances specialist since 2014.

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