Canteen Refit. Capital or revenue expenditure?

Refit of works canteen, is this capital or revenue expenditure?

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Hi

We are a smallish company with 40 employees. We are undertaking a canteen refit for our employees. This will involve taking out a couple of walls to make the existing space bigger, plastering etc. and then replacing the current kitchen units which are now old and damaged.

Can we treat this as revenue expenditure or do we have to treat as capital? Cost approx £10k, turnover £10m in year.

 

Replies (8)

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By Paul D Utherone
19th Dec 2017 12:35

Sounds mostly capital to me

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By ireallyshouldknowthisbut
19th Dec 2017 14:34

Speak to your accountants

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Oaklea
By Chris.Mann
19th Dec 2017 15:36

"AccountingWEB.co.uk is the largest independent online community for accounting and finance professionals in the UK - providing award-winning content and online engagement between members in a true community environment".

Why not look at https://www.gov.uk/government/organisations/hm-revenue-customs

Or, even KPMG LLP?

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By Accountant A
19th Dec 2017 18:49

If a company with a £10m turnover does not already have a decent tax adviser to ask, tax relief (or not) on £10,000 is likely to be the least of the issues that exist.

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By the_drookit_dug
19th Dec 2017 20:10

Are you sure you'll get all that done to a reasonable standard for £10,000?

Sounds like you need a Capital Allowances review. Plus you may be able to expense some of it as repairs. Who knows.

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By michaelblake
19th Dec 2017 20:53

In very broad terms, as far as the kitchen equipment is concerned, replacing something that was there before, without any element of enlargement or improvement, is likely to be revenue expenditure and 100% tax deductible. Any addition or enlargement will be capital but may nonetheless be eligible for capital allowances at the rate of 100%. The costs of taking down the walls and re-plastering is likely to be capital expenditure and unlikely to qualify for any tax relief. As others have noted it needs an accountant or tax specialist to analyse the nature and extent of the work that has taken place and give an opinion.

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Replying to michaelblake:
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By Accountant A
19th Dec 2017 21:20

michaelblake wrote:

In very broad terms, as far as the kitchen equipment is concerned, replacing something that was there before, without any element of enlargement or improvement, is likely to be revenue expenditure and 100% tax deductible.

I disagree. Replacing one company car with another identical company car isn't revenue expenditure.

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Replying to Accountant A:
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By Manchester_man
20th Dec 2017 04:29

It could be if the car forms an integral part of the kitchen, before and afterwards.

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