Often viewed as one of the most contentious areas of tax, HMRC is publishing draft revised guidance on what is a repair for direct tax purposes. This will replace the guidance currently in the Business Income Manual at BIM46900 onwards and that in the Property Income Manual at PIM2020. The draft guidance has been updated for recent case law which is regularly a primary source for many practitioners when reviewing expenditure under the ‘capital v revenue’ umbrella.

The brief is relevant to those carrying on a trade or property business and applies both to individuals and companies incurring expenditure on repairing business assets. The guidance applies to both trades and property businesses. This guidance will be included in the Business Income Manual later in the year, together with guidance on the statutory renewals basis.

Later this year HMRC will also be publishing expanded guidance on repairs aimed at Tax Professionals.