Work highlight

Maximising capital allowances for one of the UK’s most prestigious hotel companies

Insight shared by:

Gateley Capitus

One of the UK’s most prestigious hotel companies engaged Gateley Capitus to analyse the costs incurred on a major redevelopment of a Mayfair hotel.  Our involvement saved the client over £5m in tax.

The 172-room hotel was redesigned with features including a penthouse and garden suite, as well as a bar, gym and versatile event spaces.  The expenditure exceeded £40m and the works were carried out over a two-year period.

How did we help?

The client:

Luxury hotel owner and operator

The works:

The works comprised the refurbishment of an existing hotel including partial demolition and strip out, repairs to the external facade and replacement of the windows. Internally, the bedrooms and common areas were all overhauled. New flooring, ceilings and partitions were installed, and general decorations undertaken throughout. The en-suite facilities were overhauled and new sanitaryware installed.  New services included general power and lighting, air conditioning, extract ventilation, sprinkler system, fire alarm, CCTV and hot and cold-water installations.

The value of maximising capital allowances on a hotel development:

Using a specialised methodology and combination of property costing, valuation and accountancy skills we analysed the total development expenditure of over £40m and identified over £21m of plant and machinery allowances and nearly £6m to tax-deductible repair expenditure.   

In conclusion:

The correct analysis of construction expenditure by an experienced tax incentives advisor yields significant tax relief.  In total the client saved over £5m in corporation tax.

What you need to know

If you are an investor or occupier buying, developing, or refurbishing hotels speak to us and we will provide a no obligation review of expenditure to illustrate the tax benefits.

Got a question? Get in touch.