Restaurant Capital Allowances
A restaurant or cafe typically holds a high proportion of qualifying plant and machinery, because the commercial kitchen, the extract and refrigeration, the heating, lighting, air handling and the front-of-house fit-out are all capable of qualifying for capital allowances. Much of that value is bought with the premises or paid for in a fit-out and never itemised, so the relief sits unclaimed. A capital allowances review identifies that expenditure and puts it in front of your accountant to claim.
Do restaurants and cafes qualify for capital allowances?
Yes. A restaurant or cafe packs a lot of working equipment into a small footprint, and that equipment is where the relief sits.
Capital allowances are tax relief on money spent on plant and machinery inside commercial property. The rules sit in the Capital Allowances Act 2001, and HMRC sets out how they apply in its Capital Allowances Manual. A hospitality unit lives or dies on its kitchen and its front of house, and both are dense with fitted plant, servicing and equipment.
The relief is not automatic. It has to be identified, valued and claimed. Where a restaurant or cafe has been bought, built or fitted out without a proper capital allowances review, most of it is usually still there.
Why restaurant and cafe properties hold so much unclaimed relief
A restaurant is a small building doing a lot of work, and the qualifying content is concentrated rather than spread thin.
The commercial kitchen is the heart of it. Ranges, ovens, fryers, refrigeration, cold rooms, dishwashers, stainless steel and the extract canopy above it are all working equipment. The extract and make-up air, the grease systems and the gas and water runs that feed the kitchen are qualifying plant serving the trade.
Front of house adds its own layer. The bar and its cellar cooling, the coffee and service stations, fitted seating and counters, the lighting designed to set the room, and the decorative assets provided for customers in the restaurant trade all carry relief. Decorative assets in the restaurant trade are named as qualifying plant in the Act.
Then the building services that make the room usable: heating and hot water, air conditioning and ventilation, the electrical installation and the sanitaryware in the customer and staff washrooms. These are integral features and qualify at the special rate.
Because hospitality units are refitted often, as brands change and rooms are refreshed, the qualifying expenditure builds up over time and much of it is never claimed.
What qualifies in a restaurant or cafe
The table below sets out plant, machinery and integral features commonly found in a restaurant or cafe. The basis for each is the Capital Allowances Act 2001, applied as set out in HMRC’s Capital Allowances Manual. Exact treatment depends on the individual premises and how each item is installed and used.
| Item | Category | Basis in plain terms |
|---|---|---|
| Commercial kitchen equipment | Plant and machinery | Cookers and catering equipment, List C |
| Refrigeration and cold rooms | Plant and machinery | Refrigeration equipment, List C |
| Extract canopy, make-up air and grease systems | Plant and machinery | Ventilation serving the kitchen trade |
| Bar, cellar cooling and service stations | Plant and machinery | Fitted trade equipment |
| Fitted seating, counters and joinery | Plant and machinery | Fixtures used in the trade |
| Decorative assets for customers | Plant and machinery | Named qualifying assets in the restaurant trade |
| Heating and hot water systems | Integral feature (special rate) | Space and water heating |
| Air conditioning and ventilation | Integral feature (special rate) | Air handling to the dining room |
| Electrical installation and distribution | Integral feature (special rate) | Wiring and power serving the unit |
| Lighting | Integral feature (special rate) | Lighting installation |
| Sanitaryware and washrooms | Plant and machinery | Fitted washroom equipment |
| Fire alarms, CCTV 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 and may instead be relevant to the structures and buildings allowance. A review keeps those separate and does not overclaim.
A worked example
The figures below are illustrative. They show the shape of a typical restaurant review, not a real client. Figures are illustrative and clients are protected in accordance with GDPR.
Take a restaurant bought and fitted out for 500,000 pounds, with a full commercial kitchen, a bar and a sixty-cover dining room.
A capital allowances review might identify qualifying expenditure along these lines.
| Element | Illustrative qualifying expenditure |
|---|---|
| Commercial kitchen and refrigeration | 45,000 |
| Extract, make-up air and grease systems | 20,000 |
| Bar, cellar and service stations | 18,000 |
| Heating, hot water and air conditioning | 22,000 |
| Electrical installation and lighting | 20,000 |
| Fitted seating, joinery and washrooms | 15,000 |
| Total qualifying expenditure identified | 140,000 |
On this illustration the review identifies around 140,000 pounds of qualifying expenditure inside a 500,000 pound spend. 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 restaurant and cafe owners are not missing this relief through carelessness. They miss it for reasons that sound sensible until you look closely.
My accountant has already done my tax. Almost certainly, and it changes nothing here. A general accountant prepares the accounts and the return from the figures in front of them. Breaking a fit-out down into its qualifying plant is a separate, specialist exercise. It is not a criticism of your accountant, it is a different job. Our post on embedded capital allowances explains the split.
We put the kitchen kit through as equipment, so it is dealt with. That covers the loose equipment on an invoice. It usually misses the embedded relief in the extract, the services, the air conditioning, the wiring and the fitted areas that came with the premises or the fit-out and were never itemised.
I bought or fitted it years ago, so it is too late. Usually not. Capital allowances on embedded fixtures do not run out because time has passed. If the qualifying expenditure has never been claimed, and the entitlement was not signed away, it can generally still be identified now. See our guide to capital allowances when buying commercial property.
We lease the unit, so this is not for us. It can still apply. Where a tenant paid for the fit-out, that expenditure may carry allowances for the tenant. The right answer depends on who paid for what, which a review establishes.
How PTRC handles a restaurant 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 premises and how you came to hold it, whether you bought it, built it or fitted out a leased unit. We look at the kitchen, the extract, the bar, the dining room and the servicing. Then we 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.
We then hand the report to a qualified accountant to review and act on. They decide eligibility and make the claim. We stay available to answer questions on the detail.
There is no upfront cost. You pay only when a claim succeeds. If you want to know what to ask any capital allowances firm before you engage them, read our piece on the cowboy problem in this market.
To understand the full mechanism, see our pillar guide to capital allowances. If your claim involves a new fit-out or new equipment, the annual investment allowance and full expensing pages explain how the reliefs apply.
FAQ
Do restaurants qualify for capital allowances?
Yes. A restaurant holds substantial qualifying plant and machinery in its commercial kitchen, refrigeration, extract, bar, heating, air conditioning, lighting and fit-out. These qualify under the Capital Allowances Act 2001, and because hospitality units are refitted so often, much of the embedded relief is never claimed.
Do cafes and coffee shops qualify too?
Yes, on the same basis, scaled to the unit. A cafe holds qualifying plant in its counter and coffee equipment, refrigeration, extract, heating, lighting and washrooms. How much depends on the fit-out, which a review sets out.
Can I claim on a commercial kitchen fit-out?
Yes. A commercial kitchen fit-out usually carries significant qualifying expenditure in its catering equipment, refrigeration, extract, and the gas, water and power that feed it. Loose equipment and embedded services are both in view, and a review separates and evidences each.
Can I claim if I lease the unit?
Often, yes. Where a tenant paid for the fit-out, that expenditure may carry capital allowances for the tenant. The exact position depends on the lease and who funded the works, which a review establishes before anything is claimed.
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 restaurant qualifies
The quickest way to find out what your premises may hold 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.
Reviewed: 14 July 2026. We check our sector pages against current HMRC guidance each tax year. We are not accountants or tax advisers. A qualified accountant reviews every report and makes any claim.
See whether there is a claim in your property
A short, no-pressure conversation. There is no upfront cost, and you only pay when a claim succeeds.