HMO Tax

HMOTAX, operating as a brand of Exact Capital Allowances Ltd, specialises in providing Capital Allowances tax relief for property investors across the United Kingdom. The firm focuses on multi-let properties, Houses in Multiple Occupation (HMOs), and serviced accommodation. Its core service involves identifying and claiming tax deductions related to capital expenditure on qualifying items within these property types. HMOTAX assists property owners who pay income or Corporation Tax and own multi-let or HMO properties in securing tax refunds or reducing their tax liabilities.

The company has a history in the field, having been the first in the UK to claim Capital Allowances on HMOs, a practice it has maintained since 2008. HMOTAX leverages a combination of accountancy, quantity surveying, and tax law expertise to maximise the tax relief available to its clients. The firm highlights that a significant proportion of eligible properties have not claimed the tax due, with HMRC indicating that over 90% of such properties may have unclaimed allowances. Capital Allowances, specifically Plant & Machinery Allowances, pertain to tax relief on certain qualifying items or assets located within the 'non-dwelling areas' of multi-occupancy properties.

These allowances enable property investors to deduct a portion of their capital outlay, or purchase cost, associated with these common or non-dwelling area assets from their taxable income, thereby reducing their overall tax bill. This mechanism allows for the recovery of previously paid Income Tax, a reduction in current year income tax liability, or the rolling forward of allowances for future use. Unlike standard rental losses, which can only be carried forward until a property generates a profit, Capital Allowances can be offset against any income stream, a provision known as Sideways Loss Relief. The firm operates on a "No claim, no fee" basis and includes surveying costs within its service, ensuring transparency for clients.

The company's services are particularly relevant following new case law that confirms the ability to claim for qualifying items in common areas, as well as numerous other items throughout the property. These claims relate to fixtures and fittings inherent in the building's fabric. HMOTAX assists property owners in navigating these regulations to claim valuable tax relief. The firm works collaboratively with clients' existing accountants to ensure a seamless process or provides direct assistance for those wishing to manage their claims independently.

HMOTAX extends its specialised services to properties used as student lets and halls of residence. For these types of multi-occupancy properties, Plant & Machinery Allowances are applicable to the non-dwelling areas, such as communal kitchens, hallways, utility spaces, and shared bathrooms. These communal spaces are often treated as eligible for capital allowances because HMOs, including student accommodation, fall between residential and commercial classifications in the eyes of HMRC. The firm's expertise helps landlords of student accommodation identify and claim for fixed systems, integral features, and other qualifying assets within these shared facilities, which can result in a meaningful reduction in corporation tax over several years.