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Is it better to replace and claim allowable expenses or improve and have capital expenses?

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So first of all, I know we should have an accountant and be asking them this sort of question. We had one, they were awful, and we havn't found another one yet that can deal with all our taxes or is currently taking on new clients. 

Our property needs a new flat roof. It's currently felt but I'm finding it hard to get quotes to replace it with felt again. If we replace it with something else like rubber or fibreglass it will be classed as a capital expense. I was assuming we didn't want that, but I'm wondering if a capital expense might actually be better?

We don't intend to sell the property for at least 20-30 years, we've had it less than 6 months so far. My thoughts are that anything could happen in that time and we may not be able to claim the expense afterall or that it will technically be worth less claimed in a few decades than it would be now because of inflation. On the other hand, the tax on selling the property is probably worse/more than the tax paid on the income, so anything to reduce that is a good thing?

There is likely no right or wrong answer, and there are other things to consider, such as the cost of other materials, how long they would last, if they are better than felt etc, but I feel like having a better idea on the answer to this question would help us decide. I'm also sure I've read somewhere that if we can't replace like for like that an improvement would still be classed as an allowable expense anyway?

Thanks for any thoughts or advice on this!

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  • Flo Butler changed the title to Is it better to replace and claim allowable expenses or improve and have capital expenses?

Anything you can claim now is always better than longer term. Say the roof is £1k, how much will that be worth in 20 years or more? If you never sell, you'll never see the benefit.

I'd question why it would be a capital expense though. It's currently a roof and will still be a roof, just with modern technology. Same as changing single glazed windows to double.

We also had a flat roof replaced a couple of years ago and changed it to a pitched, tiled roof. Not sure about planning/building regs, but one of the roofers we got quotes from suggested it, so I chose not to ask... Now hopefully maintenance free for many years to come and looks so much better than any flat roof.

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I don’t know all of the details of your issue and much about roof materials (never replaced one) but reading your post It seems unlikely that replacing a flat roof would be a capital expense if you are replacing it with a modern equivalent. Similarly if you replace single glazing with double glazing windows you can claim as revenue as double glazing is the modern equivalent. I’m reading between the lines that felt vs rubber would be similar. If you replaced with a Dino V style roof you would be looking at a capital expense as isn’t like for like.

David M Slater ACMA 
Accufy Accounting
01946 552801


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