Repairs and renewals

HMRC have issued Revenue and Customs Brief 05/13 Direct tax: Guidance on repairs and renewals of assets, its draft guidance on what is a repair for direct tax purposes. HMRC states that the guidance will be included in the Business Income Manuals (BIMs) later in the year and that they will also issue further guidance for tax professionals.

The brief highlights potential updates to the following areas of the manuals:

  • BIM46900: Specific deductions: repairs & renewals: contents 
  • BIM46901: Overview 
  • BIM46905: Role of accountancy 
  • BIM46910: What is a repair: the ‘entirety’ 
  • BIM46915: What is a repair: improvements 
  • BIM46920: What is a repair: different materials 
  • BIM46925: What is a repair: changing technology 
  • BIM46930: What is a repair: Notional repairs 
  • BIM46935: What is a repair: effect of a change of ownership 
  • BIM46945: What is a repair: Assets on which capital allowances given 
  • BIM46950: What is a repair: Character of the asset 
  • BIM46990: Renewals basis - Expenditure before 2013

The draft BIM sections highlights with examples the treatment of expenditure post 6 April 2013 for the purposes of income tax and post 1 April 2013 for the purposes of corporation tax.

BIM46990: Specific deductions: repairs & renewals: Non statutory renewals basis is guidance relating to expenditure on replacement plant and machinery highlights the pre 6 April 2013, for the purposes of income tax; and pre 1 April 2013, for the purposes of corporation tax treatment of expenditure.