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Clarification re: Capital v Revenue

Sarah-LouSarah-Lou Well-KnownRegistered Posts: 141
Client owns a hairdressing salon and the building it is in (not leased), just gone through major refurbishment - salon was gutted and totally redone including complete new wiring (to include more seats) new plumbing (to incorporate more basins), completely new fittings, ceiling to incorporate spotlights etc etc.

I've read through all the info on HMRC website and followed the toolkit but I"m still not entirely sure how to classify everything and am starting to doubt my own judgement!

Would the whole lot be capital? If you are thinking about the hairdressing salon itself it is all completely new assets therefore capital but if looking at the building as a whole the refurb has increased the value of the asset (salon).

I appreciate that I may seem very unknowledgable (please don't slate me!) but I have never dealt with such a large refurb before.

Thank you

Sarah-Lou

Comments

  • Gem7321Gem7321 Experienced Mentor DevonMAAT, AAT Licensed Accountant Posts: 1,438
    I would be capitalising the whole lot as freehold improvements and determining which bits are P&M and which are integral features for capital allowance purposes
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