WE’VE ALL HEARD THE LINE, “A man walks into a bar …” and waited for the pun at the end of the sentence. However, when a tax depreciation specialist walks into a bar it’s no laughing matter as there is much more to uncover.
Many pub, hotel and tavern operators are losing thousands annually by failing to have a tax depreciation schedule prepared for their property.
Assets such as drink dispensers, gaming machines, chairs and tables, glassware, carpet, air-conditioning units, glass washers, A/V equipment and even the bar itself are all depreciable.
However, it’s essential to contact a specialist Quantity Surveyor, such as BMT Tax Depreciation, to arrange a tax depreciation schedule to ensure the available deductions for these items will be claimed.
What Can I Do?
As part of the process of arranging a depreciation schedule for any commercial property (including pubs, hotels and taverns), a Depreciation specialist will perform a site inspection to uncover the structural and fixed items that can be claimed as capital works deductions. Plus, he or she will include all of the removable plant and equipment assets contained within the property as well.
They will also uncover any renovations that have been completed to the property, even those completed by a previous owner.
As pubs, hotels and taverns are frequently renovated by their owners, it is also important to understand that additional deductions may apply when renovating a premises.
A depreciation schedule should be arranged prior to beginning any renovation work, as well as again after the renovation is complete.
This will ensure the owner can claim deductions for any assets with remaining depreciable value scrapped and removed during the renovation process.
For Example …
The following table provides a simple example of the deductions one of our Depreciation specialists found for a recently renovated pub:
As the table shows, the depreciation deductions found can be quite substantial. In the first full financial year alone, the claim is in the hundreds of thousands and over the life of the property, a pub or hotel owners depreciation deductions can total millions of dollars.
Bottom Line: Claiming for depreciation deductions is an astute move for any business owner; however, it’s important to approach the right specialist to ensure your claim is handled efficiently and effectively.