Help please x

Diannew

Work place is having a new Heating/air conditioning unit put in.

I know I can capitalise the heating/air con unit and claim capital allowances , but because this is being put in we have to replace the existing suspended ceiling and also replace the existing lights...

Question.....

Do I put the ceiling and lights through as repairs or capital expenditure ( I know I can not claim capital allowances on the lights and ceiling so there would be no tax benefits on capitalising these items but wich is the correct method for these )

Thank you if you can help

Dianne

Poodle

Hi Diane

This would be my take on this but perhaps others here may have other ideas

S25 CAA 2001

S25 building alterations connected with the installation of plant and machinery.

if a person carrying on a qualifying activity incurs capital expenditure on alterations to an existing building incidental to the installation of plant and machinery for the purposes of the qualifying activity, this part applies if,
1 the expenditure were expenditure on the provision of the plant and machinery, and
2 the works representing the expenditure formed part of the plant and machinery.

Basically if you alter a building to install plant then the alterations qualify as plant as well. and so I would suggest that you may have to capitalise the ceiling as well and claim CA's rather than claim the full cost as a repair expense this year.

Julia

Diannew

Poodle wrote: »

Hi Diane

This would be my take on this but perhaps others here may have other ideas

S25 CAA 2001

S25 building alterations connected with the installation of plant and machinery.

if a person carrying on a qualifying activity incurs capital expenditure on alterations to an existing building incidental to the installation of plant and machinery for the purposes of the qualifying activity, this part applies if,
1 the expenditure were expenditure on the provision of the plant and machinery, and
2 the works representing the expenditure formed part of the plant and machinery.

Basically if you alter a building to install plant then the alterations qualify as plant as well. and so I would suggest that you may have to capitalise the ceiling as well and claim CA's rather than claim the full cost as a repair expense this year.

Julia

Thank you so much...

this is not easy at all I have been on all the websites and even spoken to a chartered accountant who can not give me a clear answer......the issue I think is in the wording... the ceiling is not actually being altered other than one ceiling replacing another....and the light fittings replacing the old ones...which is the bit that is not clear