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Running a holiday let is a rewarding business, but like many investments, it comes with costs. From the initial purchase or construction of your property to completing renovation projects like upgrading your kitchen or bathroom, these expenses can quickly add up. That’s why it’s so important to take advantage of all tax relief available to you.
However, many owners don’t realise that the costs incurred to purchase, construct or refurbish their holiday let can qualify for capital allowances tax relief. As this additional tax relief cannot typically be claimed by an accountant, it is estimated that 70% of owners have not yet claimed capital allowances on their holiday let property and are sitting on thousands of pounds in unclaimed tax savings.
We’ve seen first-hand how important it is to work with the right professionals to maximise your earnings and savings. That’s why we’ve partnered with Zeal, a firm of Chartered Tax Advisors and Surveyors (not accountants) who specialise in furnished holiday let capital allowances claims. Zeal have helped many of our clients unlock significant tax savings that would otherwise have been missed.
What Are Capital Allowances For Holiday Lets?
Capital allowances are a form of tax relief that allowsqualifying capital expenditure to be offset against taxable profits.
These allowances reduce your taxable profits, allowing you to pay less tax while keeping more of that valuable rental income. Whether you own a single property or a portfolio, claiming capital allowances on a rental property can dramatically improve your bottom line.
Whilst accountants are able to claim some basic furnished holiday let capital allowances, it’s usually restricted to items like furniture and equipment that are purchased and have a receipt. Some common examples include furniture, furnishings, cooking and refrigeration equipment and hot-tubs.
Capital allowances can also be claimed on ‘Integral Features,’ commonly referred to as ‘Embedded Fixtures’, that were purchased with or installed in the property. Essentially, these are items that would not fall out if the building was turned upside-down such as electrical and heating systems, water and disposal pipework, kitchens, bathrooms and more.
To claim these capital allowances, holiday let owners need to engage a specialist with the necessary quantity surveying expertise and specific capital allowances knowledge.
How Zeal Can Save You
While capital allowances for landlords of short-termrentals can deliver incredible savings, it is a complex area of UK taxlegislation to navigate. That’s where Zeal come in. Identifying qualifyingitems requires expert knowledge and a detailed understanding of HMRCguidelines, which is where Zeal excels.
Zeal’s team of tax specialists and surveyors uncover every eligible allowance, ensuring nothing is overlooked or missed. Many of our clients have saved thousands of pounds thanks to their expertise. Money that can be reinvested into their holiday lets or kept as profit!
Real Savings, Real Results
Our clients who have worked with Zeal have been amazed at the results. From luxury apartments to countryside retreats, Zeal have consistently identified hidden allowances and generated significant tax refunds and long-term savings.
Case Study 1: Apartment 416, Chips Building
Purchased in 2017 for £143,675, this property underwenta full site survey by Zeal. Their team identified capital allowances amountingto almost 27% of the original property purchase price which produced income taxsavings of £15,260 for the higher-rate taxpayer owner. By amending the 2023/24self-assessment tax return to include the capital allowances claim, Zealreduced the taxable FHL profits to a tax loss of £28,900. This generated a sizeablecash tax rebate of £6,245 and reduced the owner’s upcoming tax payment by 48%.
Case Study 2: Apt 6, Home Apartments
Purchased in 2018 for £130,692 by a limited company, Zeal uncovered over £32,000 in qualifying capital allowances within this property. By amending the 2024 corporation tax return, Zeal was able to reduce the company’s taxable profits by nearly 12% and will save at least £6,080 in corporation tax savings for the business.
These are just two examples of how our clients have maximised their returns and boosted cash flow by completing a capital allowances claim.
Maximise Your Earnings with City Superhost & Zeal
Managing a holiday let is about more than just attracting bookings, it’s about making sure your property is working as hard as you are. By partnering with us and working with Zeal, we ensure our clients are not only generating income but also keeping more of it.
Our Airbnb property management services mean we take care of everything from guest bookings to professional cleaning, while Zeal ensures you’re claiming every eligible tax relief. Together, we help you maximise both earnings and savings.
The Clock is Ticking - Don’t Miss Out on Capital Allowances
Following the recent tax changes, Capital Allowances for holiday lets will soon no longer be available. This means there is now a deadline to claim your tax relief entitlement, before it's too late.
The last opportunity to make a capital allowances claim is in your 2024/25 tax return. Any cash and tax savings entitlement not claimed by the deadline will be lost forever. You could be entitled to thousands of pounds in unclaimed tax savings and even be due a cash rebate for tax you've unknowingly overpaid.
With many holiday let owners preparing their accounts around this time, now is the perfect opportunity to review your property expenses and secure potential tax relief, before the rules change. By acting now, you could unlock substantial savings and ensure you’re fully compliant with the upcoming legislation.
Ready To See What You Could Save?
Contact us below or book a Free 30-minute call with our founder, Matt, to learn more about how our partnership with Zeal can help you unlock the full potential of your holiday let investment.
