BIM46910 - Specific deductions: repairs & renewals: assets on which capital allowances given

The replacement of a component part of an asset (part of an ’entirety') is a revenue repair provided that replacement merely maintains the asset in its original form. The fact that capital allowances have been given on the asset as a whole does not prevent a revenue deduction being made for a repair to that asset.

For example:

• The replacement of an engine (or part of an engine) in a lorry is usually a repair to the lorry. A revenue deduction can be claimed for the cost of the replacement engine (or other part) even though the capital cost of the lorry (including the original engine) qualified for plant and machinery allowances.
• The replacement of a chimney which is part of the ’entirety' of a factory may be a revenue expense (assuming no improvement etc) even though industrial buildings allowance has been given on the cost of constructing the building. (See BIM46903 for more on ’entirety'.)

Plant and machinery fixtures in buildings

Some fixtures in buildings, for example show-cases (CA22110), may qualify for plant and machinery allowances.

As noted above, the fact that plant and machinery allowances have been given will not, of itself, mean that a revenue repair deduction cannot be claimed for the cost of the repair.

You will need to establish the nature of the assets involved. It will then be a question of fact whether the cost of the repair is:

• revenue expenditure is incurred on a repair of the larger asset the building (the ‘entirety’); or
• the replacement of the whole of an asset (the ’entirety’), which is capital expenditure and not allowable as a deduction, see BIM46903, or
• an improvement which is capital expenditure and not allowable as a deduction, see BIM46904.

If the expenditure is not allowable as a deduction, capital allowances may be available, for further guidance, see the Capital Allowances manual.