Trying to establish whether a repair is an allowable trading expense or a capital deduction can be a minefield. It is a complex and grey area and causes many problems. HMRC state that a repair means the restoration of an asset by replacing subsidiary parts of the whole asset. If there is a significant improvement … Continue reading Repair – capital or revenue expense?
The tax treatment between the two is very different. A capital repair is relieved against the sale of the asset whereas a repair which is classed as revenue expenditure is relieved wholly against the profits of the Business. Sometimes it is clear which category the expenditure falls under but it is now more often than … Continue reading Repairs – What is the distinction between a capital repair or a revenue repair