Expenses fall into two categories, Capital Expenses and Revenue Expenses which are directly related to the lettings business.
One way of distinguishing between the two types of expense is to ask how long does the benefit of the expense last? If the expense is, for example, the cost of adding a bedroom to the property then this would be considered a capital improvement. Any tangible improvement to the asset is considered a capital improvement and therefore not an allowable expense for the purpose of Income Tax. However, decorating a property is considered a revenue expense as every property would need to be redecorated at some point. These expenses can be claimed for the purposes of Income Tax. Here is a list of allowable Expenses:
For further information please contact us on info@intact-accounting.co.uk.
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