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Commercial Property - Capital & revenue split

Client letting one building and major renovation of another.

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Client letting one property and over three years renovating/rebuilding second unit doing building workhimself. As well as materials(clearly capital) we have motor expenses(van), telephone and broad band. He was trading from site (S/H caravans for over 10 years) prior to development.

Should I allocate most of motor, & telephone to capital costs of property improvement or set off against rent?

 

 

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By Ruddles
18th Apr 2018 13:20

42

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By Accountant A
19th Apr 2018 11:29

What I would do is apply some reasonable assumptions and then imagine yourself explaining them to some HMRC person. If it sounds OK it probably is. You can obviously refer to the mileage records he keeps for his van as a starting point for motor expenses.

If he has been at this venture for "three years", how have the costs been reported on his SA returns thus far?

I'm intrigued to know what part broadband plays in a property renovation.

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By CJaneH
19th Apr 2018 12:01

When renovation includes complete rebuilding of some wall, complete replacement roof, complete rewire, insulation etc then the internet to research materials prior to order is a must.

Basically I missed capitalisation of costs that would be revenue for a building firm.

1st year overlapped with trading, I may need to revise 2016-17

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By Accountant A
19th Apr 2018 12:08

CJaneH wrote:

When renovation includes complete rebuilding of some wall, complete replacement roof, complete rewire, insulation etc then the internet to research materials prior to order is a must.

So no duality of purpose, he only uses the broadband for his building work? Difficult to believe, no?

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