Hospitality operators may have lost money by not submitting their applications for tax reliefs on building alterations, undertaken to comply with the Disability Discrimination Act (DDA), before the end of the last tax year.
In 2004, the Government introduced a maximum tax relief of 50% for small businesses which had carried out building alternations to comply with the DDA. However, it chose not to extend the allowance in its latest budget and, as a result, operators had until either 1 April or 6 April, depending on their status, to qualify for the allowance. Small businesses can still apply for tax relief on applicable alterations, but the level of relief available has now fallen to a maximum of 40%.
Glenn Collins, head of business advisory services at ACCA, points out that many businesses have spent considerable sums of money to ensure that their premises comply with this legislation, installing features such as lifts, hand rails, new toilets and washbasins, and permanent signage, and says that such expenses qualify for capital allowances under the heading of "plant and machinery".
Even though the maximum level of tax relief has fallen to 40%, the returns on offer can still be significant. For example, the installation of hand rails costing £3,000 could result in a relief of £1,200 (£3,000 x 40%).
"With the passing of the first year allowance," says Collins, "now is a good time to make sure that you have good, accurate records [of any alterations carried out] to present to your accountant, who will be able to claim the correct amount for you."
It's not just building alterations that qualify for tax relief. Businesses may have also incurred additional costs through printing large-font documents such as menus and training staff on disability issues. Collins adds that such costs would also qualify as a revenue expense, and would therefore be wholly deductable for tax purposes within the profit-and-loss account of a company.
Source: Caterer & Hotelkeeper magazine, 07 April 2005