Holiday Let Capital Allowances

Can holiday lets still claim capital allowances?

In many cases, yes, but the ground shifted in April 2025, so this is one to check properly rather than assume.

Capital allowances are tax relief on money spent on plant and machinery, the fixtures inside a property. For years a qualifying furnished holiday let was treated more like a trading business than an ordinary rental, and that treatment opened the door to allowances on its heating, hot water, fitted kitchen and bathrooms, electrics and furnishings that an ordinary buy-to-let could never touch.

That special status has now ended. What has not ended is the relief that was validly available before the change, or the unclaimed relief sitting inside a holiday let bought years ago. That is where the opportunity still lies, and it is worth finding before you write it off.

What changed in April 2025

The furnished holiday let regime was abolished. For individuals the change took effect on 6 April 2025, and for companies on 1 April 2025.

Until then, a qualifying holiday let could claim capital allowances on its fixtures in a way a standard residential let never could. From those dates, a holiday let is treated like any other residential letting. New expenditure on its fixtures no longer attracts plant and machinery allowances the way it did.

This is the headline most owners see, and a lot of them stop reading there and assume the whole thing is closed. For anyone with history in the property, that assumption can be expensive.

What you may still be able to claim

The April 2025 change looks forward. It does not reach back and erase relief that was properly available before it.

If you incurred qualifying expenditure on your holiday let before the change, that position does not simply vanish, and any pool of allowances already established continues to be written down. If you bought a holiday let some years ago while the rules still applied, and the embedded fixtures were never separately identified and claimed, that unclaimed relief may still be there. Allowances that were validly available do not expire just because the rules changed for new spend.

None of this is automatic. It has to be checked on the facts, on how you came to own the property, when the spending happened, and whether the entitlement was ever given away at purchase. That is exactly the check a review carries out.

What qualifies in a holiday let

The table below sets out the plant, machinery and integral features commonly found in a holiday let. The basis for each is the Capital Allowances Act 2001, applied as set out in HMRC’s Capital Allowances Manual. Following the April 2025 change, these items are relevant mainly to expenditure incurred before that date and to earlier purchases never claimed on. Exact treatment depends on the individual property and how each item is installed and used.

Item	Category	Basis in plain terms
Heating and hot water systems	Integral feature (special rate)	Space and water heating
Electrical installation and distribution	Integral feature (special rate)	Wiring and power serving the property
Lighting	Integral feature (special rate)	Lighting installation
Ventilation and extract	Integral feature (special rate)	Air handling, where fitted
Fitted kitchen and appliances	Plant and machinery	Kitchen equipment provided in the let
Bathrooms and sanitaryware	Plant and machinery	Fitted washroom equipment
Fitted furniture and furnishings	Plant and machinery	Furniture and furnishings provided for guests
Hot tubs, pools and outdoor plant	Plant and machinery	Leisure equipment, where provided
Fire, smoke alarms and security	Plant and machinery	Safety and security systems

The bare structure and general building works are more likely to fall outside plant and machinery. A review keeps those separate and does not overclaim.

A worked example

The figures below are illustrative. They show the shape of a typical holiday let review, not a real client. Figures are illustrative and clients are protected in accordance with GDPR.

Take a holiday cottage bought for 450,000 pounds in 2021, run as a qualifying furnished holiday let while the rules still applied, where the embedded fixtures were never separately identified or claimed.

A capital allowances review might identify qualifying expenditure along these lines.

Element	Illustrative qualifying expenditure
Heating, hot water and ventilation	22,000
Electrical installation and lighting	16,000
Fitted kitchen and appliances	12,000
Bathrooms and sanitaryware	14,000
Fitted furniture and furnishings	8,000
Total qualifying expenditure identified	72,000

On this illustration the review identifies around 72,000 pounds of qualifying expenditure inside a 450,000 pound purchase. What that is worth in tax depends on the owner’s position, their rate of tax and the allowances available, which is exactly the part a qualified accountant works out and claims. The job of the review is to find and evidence the expenditure, not to file the claim.

Why owners miss it

Most holiday let owners are not missing this relief through carelessness. They miss it for reasons that sound sensible until you look closely.

The rules changed, so there is no point looking. That covers new spend, and it is why the timing matters, but it says nothing about the spending you did before the change or the purchase you never claimed on. Assuming you have missed the boat can cost you as much as assuming you qualify when you do not.

My accountant has already done my tax. Almost certainly, and it usually changes nothing here. A general accountant prepares the accounts and the return from the figures in front of them. Breaking a property down into its qualifying fixtures is a separate, specialist exercise. Our post on embedded capital allowances explains the split.

I claimed for the furniture, so it is dealt with. That covers the loose items you bought and invoiced. It usually misses the embedded relief inside the building, the heating, wiring, bathrooms and services that came with the property and were never itemised.

I bought it years ago, so it is too late. Often not. Embedded fixtures relief does not run out because time has passed, and the April 2025 change does not remove what was validly available before it. See our note on the furnished holiday let rules ending.

How PTRC handles a holiday let claim

PTRC prepares the capital allowances report. We do not give tax advice and we do not submit claims. A qualified accountant, your own or one from our panel, reviews the report and makes any claim to HMRC. That line never moves.

We start by understanding the property and how you came to hold it, when you bought it, how it was used, and what you have spent on it over time. That history is what tells us whether there is a claim to make after the April 2025 change. Then we look at the heating, hot water, kitchen, bathrooms, furnishings and services, and break the expenditure down item by item.

Every figure goes into SiteRegister, our reporting tool, and every figure carries its source, whether that is the Capital Allowances Act 2001 or the relevant part of HMRC’s Capital Allowances Manual. Nothing is a round number pulled from the air. You and your accountant can see the working behind each line.

There is no upfront cost. You pay only when a claim succeeds. If you want to understand the change in full, read our note on the furnished holiday let rules ending and our guide to capital allowances on furnished holiday lets.

To understand the full mechanism, see our pillar guide to capital allowances. Where you bought the property, our page on capital allowances and commercial property transactions covers how the purchase affects a claim.

FAQ

Can holiday lets still claim capital allowances?

In many cases, yes, but the position changed in April 2025. The special furnished holiday let rules ended on 6 April 2025 for individuals and 1 April 2025 for companies, so new spend on fixtures no longer attracts plant and machinery allowances the way it did. Qualifying expenditure incurred before the change, and older purchases where the embedded fixtures were never claimed, may still be worth reviewing.

What changed for furnished holiday lets in April 2025?

The furnished holiday let regime was abolished. A qualifying holiday let used to be treated more like a trade than an ordinary rental, which opened the door to capital allowances on its fixtures. From April 2025 a holiday let is treated like any other residential letting, and new expenditure on its fixtures no longer qualifies the way it did.

I bought my holiday let years ago and never claimed. Is it too late?

Not necessarily. Capital allowances on embedded fixtures do not expire simply because time has passed, and the April 2025 change does not erase relief that was validly available before it. If the qualifying expenditure has never been claimed and the entitlement was not given away at purchase, it can often still be identified. This needs checking on the facts of your property and your ownership.

What can you claim capital allowances on in a holiday let?

The common qualifying items are the heating and hot water, the electrical and lighting installations, the fitted kitchen and appliances, the bathrooms and sanitaryware, the fitted furniture and furnishings provided for guests, any hot tub or pool plant, and the fire and security systems. Each item is valued and evidenced against HMRC’s guidance rather than assumed.

Do I need my own accountant involved?

Yes, and that is by design. PTRC prepares and evidences the report, but a qualified accountant, yours or one from our panel, reviews it and submits any claim to HMRC. PTRC does not give tax advice and does not file claims.

What does it cost?

There is no upfront cost. You pay only when a claim succeeds. If a review finds nothing worth claiming, you are not out of pocket.

See if your holiday let qualifies

The quickest way to find out where your holiday let stands is the qualify calculator. It takes a couple of minutes and there is no cost or commitment.

Use the qualify calculator to start, or read how it works to see the process end to end.

PTRC has prepared capital allowances reports on commercial property for six years, applying HMRC’s own published guidance and showing the working on every figure.