Frequently Asked Questions

+ What are Capital Allowances?

Capital Allowances are tax deductions you can claim against your taxable profit on particular qualifying expenditure. Capital Allowances cover a wide range of expenditure, but for furnished holiday let owners, the focus for FHL Tax is to identify and accurately value available Capital Allowances in your rental property.

Capital Allowances allow you to claim either full or partial value of qualifying expenses as deductibles from your tax liabilities.

Long story short: Capital Allowances allow you to keep more money in your pocket.

+ How do Capital Allowances work on Furnished Holiday Lets?

After identifying the value of your qualifying expenditure, including on furnished holiday lets, the value of the allowances can be claimed through your tax computations.

Capital Allowances reduce your taxable profits, allowing you to pay less Corporation or Income tax on your rental income.

Capital Allowances may be fully set off against taxable profits in the first year, or written down over time - the handling of your Allowances depends on many factors, including when the expenditure was incurred and how much of it qualifies for Capital Allowances.

+ My purchase contract doesn't mention Capital Allowances. Can I still benefit?

In short, probably.

Capital Allowances are rarely covered in residential property transactions and most conveyancers will be unaware of them. If your property was used as someone’s home or for long-term lettings, there are unlikely to be any restrictions.

Even where the property has been used for holiday lettings in the paste, it’s likely that there are still some Capital Allowances available to you.

+ My accountant deals with my tax. They will have already claimed all the Capital Allowances I'm eligible for, right?

Probably not!

Accountants are experts in their field, but Capital Allowances are complicated; even the best accountants are likely to have missed opportunities for tax relief, especially when it comes to property and furnished holiday lets.

To fully maximise Capital Allowances, you need specialist skills, including valuation and quantity surveying, as well as an in-depth knowledge of tax legislation, case law, and the latest HMRC and VOA guidance.

+ I don't know where any of my old documents are. Can I still claim?

Although we prefer working from your historical records for their accuracy, it is still possible to claim using publicly available records. We’ll start with any records you do have, and then advise on how best to proceed.

+ I purchased my furnished holiday let property a long time ago. Can I still benefit from Capital Allowances?

Yes, you can still benefit. There is no time limit on claiming Capital Allowances, which is why we delve deep into your historical transactions in the Historical Expenditure Review. All your historical property transactions and redevelopment or improvement expenditure can be claimed against your current tax liability.

If you’ve recently submitted a tax computation to HMRC, we can amend this and resubmit, often leading to a refund of overpaid tax.

+ My purchase contract states no allowances are available or contains an election. Can I still benefit?

You probably can.

Purchase contract restrictions on furnished holiday lets only apply to assets within the building on which the seller could have claimed. Conducting a forensic analysis of the building’s history and a thorough survey, we are often able to uncover assets that fall outside of the contract’s restrictions and can be claimed by you.

+ Is this tax evasion? Won’t I get in trouble?

FHL Tax (and its parent company, MJS Tax) does not support tax evasion. All services conducted by us are claiming legitimate Capital Allowances under current legislation and guidance provided by HMRC and HM Treasury.

We will never condone or advise tax evasion.

+ Are there any upfront fees to pay for your services?

No. Fees for our furnished holiday lettings services are only due once our investigations are complete and we have submitted our findings to you.

Fees are either based on a proportion of the tax savings we find for you or a fully fixed fee. Fees are always agreed in advance in writing and will not be changed mid-project.

+ How can I be sure you’re providing a professional service?

All of our activities are regulated by the Royal Institution of Chartered Surveyors (RICS) and our advisors are regulated by both RICS and the Association of Tax Technicians. We will never condone, encourage or be involved in any money laundering or tax evasion.

We are professional experts in the industry, with proven results.