Caterer, Licensee & Hotelier
Design and Refit
Keeping Track Of Investments Allen Pavitt Contracts Can Drive Business Value
KEEPING TRACK of any upfront investments in property, efficiency or product development initiatives can help hospitality and leisure businesses to drive value and manage cash flow positively. In a surprising number of cases, such investments could qualify for R&D tax relief or form the basis of a capital allowances claim.
In a sector that is required to respond quickly to changing customer preferences and fierce market competition, it is important to stay one step ahead by investing in new service offerings, refurbishments and sales and marketing activities on a regular basis. Crucially however, some business owners are not making the most of their investments, and are failing to claim back significant sums in the form of tax reliefs and capital allowances. In an industry where evolution is crucial, business leaders must be sure to analyse and execute claims promptly and efficiently in order to free up funds for future investment. The R&D tax credit scheme was launched by the Government in 2000 to incentivise businesses investing in innovation. Under the scheme, profit-making SMEs can recoup up to 46p of every £1 invested in qualifying activities and even those that make a loss can claim a tax refund of up to a third of the money they invest. While claims are on the rise, many businesses are still missing out on R&D tax relief because they simply don’t believe that the investments they are making would qualify for the scheme. Tellingly, hospitality and leisure businesses are among those least likely to claim R&D tax credits. HMRC data reveals that less than 1% of claims for R&D tax relief received in 2014/2015 were submitted by ‘accommodation and food’ businesses. There are a number of different types of investment that may qualify for the scheme. These include:Investment in new products or processes, the creation of websites and software for internal or external use, data management and analysis, sustainability efforts and carrying out work on listed buildings. Some of the more intriguing R&D claims submit-
ted by hospitality and leisure companies include a restaurant that used a 3D printer to make bakery and other food products and a hotel that invested in glass structures that help to conserve energy on a golf course by adapting existing technologies to turn grass clippings into energy. When businesses are considering ways to make the most of their investments, it can be helpful to ask ‘what problems have been overcome?’ Approaching the subject in this way can often uncover opportunities to claim R&D tax credits that they may not have been thought of previously. The timing of claims is also important, as claims can only be made for activity dating back two accounting periods. For this reason, a full assessment of the company’s investments and other activities should be carried out at an early stage and tracking processes should be put in place to help monitor R&D spend on an on-going basis. In the case of capital allowances, it may be possible to submit a claim to recover costs associated with building or refurbishment projects. Depending on the use of specific materials or equipment, it may also be possible to increase the value of such claims and reduce the company’s corporation tax liability further. The majority of claims for capital allowances attract tax relief of either 18% or 8% on the expenditure incurred, however businesses should also consider and maximise first-year allowances. In addition, where a business has invested in plant and machinery that is energy-efficient or otherwise benefits the environment, it may also be possible to claim ‘enhanced capital allowances’, which are also calculated based on 100% of the capital investment. Any investment decision should be undertaken following an extensive evaluation of costs, business outputs and the projected return on investment. Care should be taken to utilise R&D tax relief and capital allowances to their full potential, freeing up extra resources for growth and new business development. Driving the business forward in this way will allow firms to streamline processes and access new products and services to gain an edge over the competition and maximise revenues. Dave Gosling is partner and head of the hospitality and leisure sector at accountancy firm Menzies LLP The firm has authored a whitepaper which outlines the key considerations and steps businesses should undertake to unlock R&D tax reliefs and capital allowances, see the full report here. www.menzies.co.uk/boost-business-bottom-line/
ALLEN PAVITT Contracts is Europe's leading manufacturer and supplier of hospitality products. Our designs include the very latest style in banqueting and conference furniture currently leading the way for comfort and ease of use.
All of our products are manufactured in the UK and include dance floors, folding tables, stages, conference chairs and tables. These are all guaranteed to perform in the most testing conditions within the busiest venues. We are particularly proud of our modern locking portable dance floor system with 21st century technology replacing high maintenance products! To assemble simply push together and the
locking floor is ready to use and will not come apart. Hard wearing laminate surface ensuring service free lifetime use. To compliment our exhaustive range of standard products, we also build bespoke items for other areas such as theatres and concert venues. Compatible with our other UK suppliers such as Burgess, our furniture provides the very highest standards of reliability, giving every confidence to the discerning hotelier. Other products within the range include table cloths, skirting, valances, chair covers and conference cloths. These are made to fit our chairs and tables plus those of other manufacturers. We would be delighted to discuss your requirements, and provide free no-obligation quotes call us now on 01404 890290 and visit www.allenpavitt.com
Woodman Chairs is a long established, dedicated chair manufacturer and wholesaler who make most of their own chairs. We offer a wide and varied choice of solid oak and beech chair and table styles – both modern and contemporary – with many finish and seat options. Included in our range is an exciting choice of sturdy bar stools and bar tables. The fact that we make gives us greater control and flexibility. It also enables us to offer bespoke chair and chair frame or component production to end customers or other suppliers and manufacturers looking for their own design or seeking to
create a unique range or theme, again in both oak and beech, raw or finished. Always keen to innovate, Woodman are constantly introducing new styles and have recently added Carver options to their more popular dining chairs and have further expanded their range of bar stools to include rush seated and fabric pad options. Here is a simple decision that won’t require a Referendum! If you want your customers to have the best choice, with honest quality, at affordable prices, with decent lead times and no minimum order, then you need only vote Woodman for your chairs. For further details call 01884 841789, visit www.woodmanchairs.co.uk or email firstname.lastname@example.org
Tel: 01404 890290 email@example.com Complete Table system for Banqueting
Folding Tables Nylon Flock Plain Timber Laminate
Conference Cloth Table Skirting
Wheeling Folding Stage one man operation
Conference Tables Portable Dance Floor Easy clean no polishing Locks together will not come apart All Manufactured in the UK at one premises Allen Pavitt Contracts
Issue #198 of CLH News - the leading monthly trade publication for the independent hotel, pub and restaurant sector of the hospitality indus...