REWIRE IN A COMMERCIAL BUILDING

WHERE TO POST REWIRE COSTS FOR A COMMERCIAL BUILDING

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I am not quite understanding HMRC's 'integral features' notes applying from April 2008. It appears that an electrical system now qualifies as plant and machinery, HMRC give a definition of an electrical system and I read it as cabling, sockets and light fittings within the building for supplying power. The rewire was more or less like for like, the only improvement being due to the advancement of technology. I was going to post this as a repair to profit and loss; should I now post it to plant and machinery or does this only apply for new installations?

Thanks for any help.

 

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Badger
By Conniving Badger
16th Jun 2024 01:33

As always, you'll need to take a holistic approach to your situation rather than just considering the rewire in isolation, but generally it depends on the cost of the rewire actually performed compared to the arm's length cost of replacing the entire electrical system. If the cost of the work actually carried out is more than 50% of the quoted total replacement cost (or indeed if the total electrical system is actually replaced), it needs to be treated as capital expenditure on the replacement of the electrical system rather than a revenue repair expense.

HMRC actually have some very clear guidance on this at CA22340 which I'd recommend you have a read through.

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Replying to Conniving Badger:
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By mrwmark
16th Jun 2024 03:03

Thank you for taking the time to reply. The link helps. In this case a total rewire and paid for on the receipt of the invoice just after the work was completed. So it's all capital.

Kind regards.

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