Fit Out Expenses

[anna2101]

Hi there i have a question on the accounting treatment of fit out expenses.

I have aclient who i have started to do the books for. He recently started up his Hairdressers business as a sole trader. How do i treat his fit out costs as he had to renevate the shop he leased, an expense or capitalise?

Many thanks in advance for any advice you may have!

 

[elaine@cheapaccounting]

Depends - fit out costs will cover a huge list of things, some revenue and some capital.

Some may be alterations to the building - you will need to do a bit of reading on the tax treatment. Look at Capital allowances on HMRC web site or from your study pack notes as a start.

 

[MyAccountantOnline]

Hi there i have a question on the accounting treatment of fit out expenses.

I have aclient who i have started to do the books for. He recently started up his Hairdressers business as a sole trader. How do i treat his fit out costs as he had to renevate the shop he leased, an expense or capitalise?

Many thanks in advance for any advice you may have!

If you are dealing with this persons bookkeeping why not have a word with their accountant?

If you were working for one of my clients I'd suggest you have one heading for 'fit out costs' and put as much detail as possible against each item so that I could look at it when doing the year end accounts. As Elaine mentioned the tax treatment of the costs varies considerably depending on exactly what the costs are.