Expenditure on Rented Office

[Alfaz]

Hello

We have just spent £43k on an office fitout to a building we are renting on a 5 year lease. This is fixed items such as new carpets, decorating, built in cupboards and a canteen. We agreed to pay this ourselves as the landlord is charging a very favorable level of rent and was not willing to bear the cost.

Please could someone confirm whether this is classed as an asset or expenditure?

I think I should capitalize this expense to Office Equipment and Furniture, as this is basically what it is and depreciate it on a straight line basis over 5 years as this is the length of the lease and how we currently depreciate other office equipment and furniture.

Appreciate if someone can confirm please.

 

[NickGrogan]

Ask your accountant.

In the event of a disagreement with the taxman later, you can't go back and say UKBF told me it was ok.

 

[Mark T Jones]

Do you have a preference?

In a fit out there are usually elements of both/either, so you can probably sway it.

 

[Paul Norman]

You certainly could treat it as you describe, and I probably would.

But do speak to your accountant, as it is a significant amount and you want to ensure you are getting the best outcome in the way you do it.

The are, on some capital items, some heightened capital allowances at the moment. Your accountant will know whether that applies, for example.

 

[UK Contractor Accountant]

https://assets.publishing.service.g...t_data/file/355656/draft-guidance-repairs.pdf

 

[Spur Support Services]

You need to look at each of the elements to determine their nature.

If you are a company, certain new capital expenditure sine April 2021 may be eligible for the super deduction, which gives you 130% relief in the year of spend.

Your accountant should be able to run through the capital spend to assist in identifying the appropriate treatment and allowances

 

[Alfaz]

Thanks for all your advice.