Guys, please explain why Repainting the exterior of the company’s office building is considered to be allowable when calculating tax adjusted profit ?
Greenzone Ltd runs a business providing environmental guidance.
Thank you.
Ask the Tutor ACCA TX-UK
a f6 (uk) question on allowable expenses in corporate taxation.
Repainting and decorating is revenue expenditure on a business asset and is therefore allowable. If capital expenditure was incurred, for example an extension to the building then this would be disallowed. What trade the business operates does not matter.
Thank you so much, ACCA TUTOR. Have a nice week.
Just because a business incurs capital expenditure that does not mean that capital allowances will be available - it must be qualifying plant and machinery to claim any form of capital allowance whether that is AIA, WDA or FYA! Therefore no capital allowances on building extension unless any part qualified as integral features.
You do not need to check the HMRC website, you need to focus on what is in your syllabus as contained within your study material - this does not include dealing with "assisted areas"!
Fundamental issues that you should know are that when dealing with a disposal you deduct sale proceeds up to a MAXIMUM of original cost in the capital allowances computation and that a motor car is an exempt asset for purposes of capital gains!
Thanks a million for clearing the doubts.
Regards
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