Premises repairs & maintenance

Conditions

• The cost of repairing a worn or dilapidated business premises is normally an allowable revenue expense. HMRC's Business Income Manual states: 'the cost of repairing a worn or dilapidated asset is normally allowable expenditure' (BIM46901). GOV.UK's self-employed expenses guidance also lists 'repairs and maintenance of business premises and equipment' as an allowable cost (updated November 2024).
• The central distinction is repair versus improvement. A repair is allowable: the work allows the asset to 'simply be used to do the same job as before.' An improvement is capital expenditure and not immediately deductible: after the work, 'more can be done with the asset, or the asset can be used to do something that it could not do before.' (Source: BIM46920.)
• Using modern materials during a repair does not automatically make it an improvement if the asset performs the same function afterwards. Replacing a damaged floor with a more durable modern composite that does the same job remains a repair. (Source: BIM46920, with worked examples in BIM46911.)
• Putting a newly acquired, dilapidated premises into usable condition is not an allowable repair — HMRC treats this as capital expenditure because the cost is part of acquiring the asset in working order. This applies even if the physical work is identical to a repair that would be allowable for a sitting tenant.
• Routine maintenance costs — for example annual boiler servicing, repainting, gutter clearing, or a cleaning or grounds maintenance contract — are straightforwardly allowable revenue expenses.
• Significant structural work and new construction are capital in nature and may be covered by the Structures and Buildings Allowance (SBA) rather than as an immediate expense deduction. Take professional advice on large-scale works.
• Employees cannot claim premises repair costs as a personal tax deduction.

Common mistakes

• Treating an improvement or upgrade — for example adding a mezzanine floor, extending the premises, or significantly refurbishing a newly acquired dilapidated building — as a repair and deducting it in full as a revenue expense.
• Claiming the cost of putting a newly purchased run-down property into usable condition as a repair — HMRC treats this as capital.
• Overlooking routine maintenance contracts (cleaning, servicing, grounds maintenance) as allowable — they are often straightforwardly deductible and add up over a year.

What to keep

• Contractor invoices clearly describing the work carried out.
• Written specifications or instructions issued to the contractor before work started, showing what was asked for.
• Photographs showing the condition before and after the work, particularly where the nature of the work (repair vs improvement) might be questioned.

Real-world example

A sole trader's workshop has a leaking roof causing water damage. She pays a roofer £2,800 to replace the damaged tiles and re-seal the affected area. The work restores the roof to its original watertight function — it is a repair and the cost is allowable in full. When she also asks the roofer to install two new roof lights that were not there before, the additional cost for that work is an improvement and goes through capital allowances instead.

Frequently asked

Related allowances