½Û×ÓÊÓƵ

Repairs and renewals

Produced by a Tolley Owner-Managed Businesses expert
Owner-Managed Businesses
Guidance

Repairs and renewals

Produced by a Tolley Owner-Managed Businesses expert
Owner-Managed Businesses
Guidance
imgtext

The key consideration in determining whether expenditure on repairs and renewals is allowable as a deduction for tax purposes is whether it is capital or revenue in nature.

In some cases, it can be relatively straightforward to identify revenue repairs. HMRC provides the following list of examples of deductible items:

  1. •

    exterior and interior painting and decorating

  2. •

    damp and rot treatment

  3. •

    mending broken windows, doors, furniture and machines such as cookers or lifts

  4. •

    repointing

  5. •

    replacing roof slates, flashing and gutters

  6. •

    deep cleaning

PIM2020

In other cases, the distinction can be less clear. Where the expense enhances, expands or improves an asset, it is a ‘sum employed as capital’ in the business and the expense is disallowed.

It is also possible that the repair costs are not incurred ‘wholly or exclusively’ for the purposes of the trade, in which case they would not be allowable.

This guidance note considers the application of these general principles and other specific provisions in relation to repairs and renewals expenditure.

See BIM46900 and Simon’s Taxes B2.466.

Tax

Continue reading the full document
To gain access to additional expert tax guidance, workflow tools, and tax research, register for a free trial of Tolley+â„¢
Powered by

Popular Articles

Short-term business visitors (STBVs)

Short-term business visitors (STBVs)What is a short-term business visitor?An STBV for UK tax purposes is an individual who performs duties for a non-UK employer and as a part of those duties has been asked to spend a short period working in the UK. There is a common misconception that there is

14 Jul 2020 13:40 | Produced by Tolley in association with Gill Salmons Read more Read more

Entity classification

Entity classificationImplications of entity classificationIf a subsidiary is established, it is important to determine how it will be treated for UK tax purposes as this will determine the basis on which it is taxed. A subsidiary may either be transparent (like a partnership, where the individual

14 Jul 2020 11:37 | Produced by Tolley Read more Read more

Withholding tax

Withholding taxIntroductionUK tax must be withheld on UK payments including:•interest•royalties•rental incomeUK withholding tax may be reduced under the provisions of a double tax treaty (DTT). Prior to 1 June 2021, payments of interest and royalties made to EU resident associated companies were

14 Jul 2020 14:01 | Produced by Tolley Read more Read more