One of our clients, a husband and wife partnership, have owned and managed a North Devon hotel for more than ten years.
Every year their previous accountant made their accounts up to 31 October and told them how much tax they had to pay in January and the following July. Nothing more.
What we did
We commissioned a forensic capital allowances review of the hotel. This identified more than £75,000 of integral fixed assets in the hotel from the date of acquisition on which no tax relief had been claimed. This equates to ongoing income tax savings worth £15,000.
The partnership’s year-end was October. This meant that some profits from the early years of trading had been taxed twice. Normally you get this double taxation back when the trade ceases. Instead, we changed the partnership’s year-end to 31 March so they could claim that tax back now.
What was the result?
Our client had been expecting to pay more than £6,000 in tax on 31 January. Instead they received a tax refund of almost £9,000.
The tax losses created by this mean that they won’t have to pay any income tax for two years.
In addition, they were now eligible for Tax Credits and receive several hundred pounds a month.
All this was achieved with simple, non-contentious tax planning.
Would you like to know what we can do to help you pay less tax? E-mail us to arrange your free initial consultation.
