Hi,
Apologies if this is a basic question but as a student I will ask it anyway as it is quite confusing. I understand that certain items of plant & machinery attract capital allowances but these are exceptions. When people discuss capital expenditure which leads to an improvement which can be capitalised as a fixed asset rather than a repair which is treated as an expense, does this improvement also attract capital allowances for tax purposes. For example, a warehouse floor which has been improved by putting on a new coating is normally considered part of the premises and so does not qualify for capital allowances but a carpet which replaces old and unsuitable carpet bought as part of the building could qualify for capital allowances. Is this intepretation correct?
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not that simple
Books have been written on this: it's very complicated.
Start with HMRC's view.
The answer to your question is actually yes...
... the starting point is to determine whether or not the expenditure is capital or revenue (which I grant isn't always easy) in nature. If it is revenue and incurred wholly and exclusively for the purposes of the trade (another tricky area) then it's fully allowable as a deduction from the business profits.
If on the other hand, it's capital in nature, then relief in the way of capital allowances is only available if there is a provision that gives capital allowances on that type of expenditure. The most notable thing that attracts capital allowances is plant and machinery and the legislation does identify when things are part of a building and not plant as you say.
In your warehouse floor example, the floor itself is part of the building, and HMRC argue that any permanent/fixed covering is similarly treated. If, however, the coating applied was necessary because of the particular trade of the taxpayer, there might be an argument that it should be plant.
There doesn't seem to be anything wrong with your interpretation though.