A sole trader rents a workshop.
With the permission of the landlord, the sole trader is adding a small extension to accomodate a need for extra storage.
The total cost is anticipated to be £5k to £10k and is to be fully met by the sole trader.
Can the sole trader deem the cost to be a fixed asset and claim Capital Allowances? Or can the cost be treated as a revenue expense?....or neither?
Replies (10)
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On what basis would you be claiming Capital Allowances?
On what basis would you be claiming a revenue expense?
Where does fairness come into tax? What relevance is a classification as a 'business-related cost'? Have a look at Dixon (H.M. Inspector of Taxes) v Fitch’s Garage Ltd.(1) (1971-1977) 50 TC 509. The canopy was undoubtedly a 'business-related cost'.
Where does fairness come into tax? What relevance is a classification as a 'business-related cost'? Have a look at Dixon (H.M. Inspector of Taxes) v Fitch’s Garage Ltd.(1) (1971-1977) 50 TC 509. The canopy was undoubtedly a 'business-related cost'.
I've bought petrol at Fitch's Garage. I didn't realise until I looked at my receipt.
It's not unfair. Other sole traders also don't get tax relief.
Have a little read of this discussion... do read to the end.
https://community.hmrc.gov.uk/forums/customerforums/sa/47003f84-af1a-ea1...
As can unincorporated entities, but that's nothing to do with your situation. Also that reference is all to do with lease premiums, not lease payments in general.....although at the very end of the linked discussion, it would appear that incorporated entities can get relief for lease payments - BIM46255?
Also that reference is all to do with lease premiums, not lease payments in general.
How would you treat the transaction from the landlord's perspective?
In practice probably do nothing because the likelihood of it being brought to the attention of the landlord's accountant is nil. Are you hinting towards PIM1212?