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HMRC internal manual

Property Income Manual

Deductions: repairs: overview

Repair means the restoration of an asset by replacing subsidiary parts of the whole asset. An example is the cost of replacing roof tiles blown off by a storm. There won’t be a repair if a significant improvement of the asset beyond its original condition results - that will be capital expenditure. For instance, there will be a capital improvement if the customer takes off the roof and builds on another storey.

A repair is normally a revenue expense that can be deducted in computing property business profits. Capital expenses are generally not deductible in computing profits but there was a limited concession for ‘notional repairs’, which ceased to have effect from April 2001. In addition, allowances are available for certain kinds of capital expenses, such as the expense of constructing or extending industrial buildings.

Examples of common repairs that are normally deductible in computing rental business profits include:

  • exterior and interior painting and decorating,

  • stone cleaning,

  • damp and rot treatment,

  • mending broken windows, doors, furniture and machines such as cookers or lifts,

  • re-pointing, and

  • replacing roof slates, flashing and gutters.

Further guidance is given in the Revenue and Customs Brief 5.