In a pub, restaurant or hotel refit, the equipment, furniture, kitchens, bars, sanitary ware and decorative items chosen to create the venue’s atmosphere can usually be claimed as plant, while walls, floors, ceilings, shop fronts and staircases are part of the building and are excluded by section 21 of the Capital Allowances Act 2001. Electrical and lighting systems, heating, cold water, ventilation and air conditioning are integral features, which qualify but go in the special rate pool. Most refits up to £1 million can be relieved in full in the year through the Annual Investment Allowance, so the real work is splitting the contractor’s bill correctly.

Why does hospitality get different answers from other trades?

Whether something is plant depends on how it is used in the particular trade. In CIR v Scottish & Newcastle Breweries Ltd, a hotel and pub company claimed allowances on light fittings and decorative items such as wall plaques, tapestries, murals, prints and sculptures. The courts accepted that these were plant because creating an atmosphere for customers to enjoy was an important function of the trade. HMRC’s Capital Allowances Manual at CA21130 contrasts this with a painting on an accountant’s office wall, which is not plant because selling atmosphere is not part of an accountant’s business.

Statute reflects this. List C in section 23 includes, as item 14, decorative assets provided for the enjoyment of the public in hotel, restaurant or similar trades. HMRC will accept decor as plant only if the trade involves creating and in effect selling an ambience, and the items were specially chosen to create it. The general tests are explained in what counts as plant and machinery.

Which refit costs usually qualify as plant?

Section 23 saves the following List C items from the building exclusions, although each still has to be plant on normal principles:

  • cookers, dishwashers, refrigerators and similar equipment, washbasins, sinks, sanitary ware, furniture and furnishings (item 5);
  • storage equipment including cold rooms, display equipment, and counters, checkouts and similar equipment, which covers bar counters and back bar fittings (item 4);
  • refrigeration or cooling equipment (item 9), and cold stores (item 18);
  • sound insulation provided mainly to meet the particular requirements of the trade (item 7), relevant to music venues;
  • computer, telecommunication and surveillance systems including their wiring, such as tills and CCTV (item 8);
  • fire alarms, sprinklers and burglar alarms (items 10 and 11);
  • decorative assets for the enjoyment of the public in hotels and restaurants (item 14);
  • signs, displays and advertising hoardings (item 15).

CA21200 adds that carpets, curtains, cutlery, crockery, glassware, linen and kitchen utensils are treated as plant if they meet the two year durability test. GOV.UK notes that large numbers of very similar items, such as crockery in a restaurant, can be pooled together as short life assets.

How are integral features treated?

Section 33A treats the following as integral features: electrical systems including lighting, cold water systems, space or water heating, powered ventilation, air cooling or air purification (and any floor or ceiling forming part of such a system), lifts and escalators, and external solar shading. In a hospitality refit that usually means rewiring, decorative and general lighting, kitchen extraction, air conditioning, boilers and hot water. CA21140 notes that the old argument over whether general lighting was plant has gone, because section 33A now treats all lighting systems as plant.

Integral features can take the Annual Investment Allowance, but any balance goes into the special rate pool at 6% a year rather than the main pool, which is 14% from April 2026 (18% before). Under section 33B, spending more than 50% of the cost of replacing an integral feature, or more than 50% in aggregate within 12 months, is treated as a replacement and is capital, not a repair. See integral features and the special rate pool.

What counts as building work?

Section 21 denies plant allowances for a building and for assets incorporated in it, including walls, floors, ceilings, doors, windows and stairs, and mains services. The restaurant cases show where the line falls:

  • Wimpy International Ltd v Warland. Claims on replacement shop fronts, floor and wall tiles, staircases and raised floors failed; murals, decorative brickwork and wall panels were allowed. Hoffmann J asked whether the item keeps a separate identity, how permanently it is attached, whether the structure is complete without it, and whether it is likely to be replaced within a short period.
  • Hampton v Fortes Autogrill Ltd. False ceilings in a restaurant that only concealed pipes and wiring were not plant (CA22080). A ceiling or floor that forms part of a ventilation or air conditioning system, such as a plenum, does qualify.
  • Floors. CA22070 says raised and mezzanine floors are excluded, but a temporary floor laid solely so a room can be used for dancing is plant.

Partition walls qualify only if moveable and intended to be moved in the course of the trade (List C item 13). Section 25 helps with builder’s work: alterations to an existing building that are incidental to installing plant, such as forming openings for extraction ducts, are treated as part of the plant. There must be a direct link to the plant, and additions to a building do not qualify.

Can the building element get any relief?

Construction, renovation or conversion costs that are not plant may qualify for the Structures and Buildings Allowance at 3% a year, if all construction contracts were signed on or after 29 October 2018 and an allowance statement is prepared before claiming. The cost of the site, planning permission, integral features and fixtures are excluded, as is anything that qualifies for plant allowances. See structures and buildings allowance. Genuine repairs and redecoration are not capital at all and are deducted as business expenses.

Which allowances give relief in the first year?

  • Annual Investment Allowance. 100% relief on up to £1 million a year of plant, including integral features; see annual investment allowance.
  • Full expensing and the 50% allowance. Companies only, for new and unused plant bought from 1 April 2023: 100% on main rate items and 50% on special rate items; see full expensing.
  • 40% first year allowance. Under section 45U, for new and unused main rate plant bought on or after 1 January 2026; unlike full expensing, the section is not limited to companies.

Section 93 also stops fixtures in a hotel, retail shop or showroom being long life assets, so an expensive hotel installation is not pushed into the special rate pool on that ground.

How might a restaurant refit be split?

Illustration only. A company spends £150,000 refitting a restaurant it leases:

Cost Amount Treatment
Kitchen equipment, bar counter, furniture, tills £55,000 Main rate plant
Rewiring, lighting, extraction, air conditioning £40,000 Integral features, special rate
Murals and specially commissioned artwork £5,000 Plant under List C item 14
New shop front, floor tiles, false ceiling, fixed partitions £45,000 Building; possibly 3% SBA
Repainting existing walls £5,000 Revenue repair

The £100,000 of plant falls within the Annual Investment Allowance. The £45,000 gets no plant allowances.

What mistakes come up most often?

  • Claiming a lump sum contractor invoice. Without an itemised breakdown HMRC may refuse the plant element; ask the contractor to analyse the costs.
  • Claiming all decor. Only items specially chosen to create the ambience being sold qualify.
  • Putting integral features in the main pool. Any balance after first year relief belongs in the special rate pool.
  • Buying a pub without a fixtures agreement. GOV.UK says a buyer can usually only claim for fixtures the seller claimed for, and must agree their value with the seller; without that, nothing can be claimed.
  • Tenant or landlord. A tenant who pays for fixtures can claim, but only the person who bought the item can claim.

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Reviewed by Christine Anderson, Broker, Solar Protect. Last reviewed 19 October 2026. Part of Accountapedia, the Solar Protect guide to UK tax and accounting. This page is general information, not personalised advice.