B&B Owners - Tax Free Income
As a B&B owner you could be entitled to tax free income by virtue of capital allowances as when you purchased the B&B you did not just purchase "bricks and mortar" you also inherited all of the plant and machinery embedded within the building.
Capital allowances are sums of money you can deduct from your overall net profit in order to lower tax bills and essentially create tax free income. These allowances are derived from plant and machinery within the property and are claimed under the Capital Allowances Act 2001.
Items of plant and machinery that you inherited and qualifies for capital allowances include heating and ventilation systems, electrical and lighting installations, bathroom and kitchen suites and more. HMRC state that all items of plant that have a business use can be claimed under capital allowances and this list can be found in the Capital Allowances Act 2001, Section 23, List C.
Your accountants will more than likely already be claiming capital allowances for fixtures such as beds, wardrobes, computers and kitchen equipment, but most fail to claim the largest deduction available on the property itself. This is due to the fact that in order to claim capital allowances on the building you require a site inspection to be completed by a specialist CA surveyor who provides a detailed report outlining what qualifies and what does not.
On average a B&B owner could receive up to 35% of the property purchase back as a source of tax free income which could last as long as 10 years depending on the nature of the expenditure.
Capital allowances are a legitimate and HMRC supported tax relief and the legislation surrounding it dates back to the 1870's. The way in which you claim these allowances is amended annually by the goverment within Finance Acts and is 100% not a loop hole in tax law or a scheme.
If you would like to see what you could claim please follow the link and get a completely free and no obligation quote. https://www.jamesnazir.com/doiqualify
Reference Point - Capital Allowances Act https://www.legislation.gov.uk/ukpga/2001/2/section/23