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Capital Vs repair? Fencing / new carpark etc

Should these items be capital or expensed?

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Before I settle down to read the enormous HMRC document BIM46900 on repairs & renewals, I thought i'd ask for opinions on the following costs....

Would you expense these items through the P&L or capitalise them? They involve works to a business building (owned personally by the sole director of the business, and rented to the business by the director). All the costs were paid for by the business. And if capitalised, are capital allowances available to claim....

New equestrian fencing to the value of £8.2k

New carpark (for client use) £7500

New bathroom at the building £2276


Replies (5)

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By Accountant A
27th May 2019 18:22

What does the lease between the director and 'the business' say regarding responsibility for repairs and improvements?

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Replying to Accountant A:
By southgirlaccountant
28th May 2019 18:02

I don't think there is a formal 'lease', its my first year of this client, and looking at the current FA register, there were items capitalised such as septic tank, planning fee's etc, so i think property improvements have been capitalised in the past. I think I will capitalise the carpark....just not sure about fencing

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By Tax Dragon
29th May 2019 17:00

Are you sure about the availability of CAs?

Mind you, if "the business" has no interest in the land, are you sure any of those items are capital? What's the enduring benefit/asset created (for "the business")?

I'm just going to put this out there. Might even the payments to obtain planning permission and to enhance the landlord's property (that have previously been capitalised) be allowable as (a form of) rent?

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By plummy1
31st May 2019 13:41

Could I ask what is the nature of the business?


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By Vile Nortin Naipaan
31st May 2019 13:46

I can confirm that the provision of a benefit in kind is a revenue expense.

See Denny:

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