Why it matters
What Capital Expenditure vs Revenue Expenditure means for a landlord
The test is whether you are restoring the property to its previous condition (revenue) or improving it beyond that (capital). Replacing a broken single-glazed window with a modern double-glazed one is usually still a repair, because double glazing is today’s equivalent; adding a conservatory is an improvement. Getting the line wrong can mean losing a deduction or making a claim HMRC will not accept, so record the before-and-after condition and the reason for every significant cost.
Worked example
How it plays out
Kate replaces a rotten single-glazed window in her rented flat with a double-glazed one, which is generally a repair because double glazing is now the normal standard. The same year she adds a conservatory, which is capital. She keeps both invoices, each with a short note explaining which it is and why.
Common mistakes
Where landlords go wrong
- 01Deducting an extension or conservatory as a repair.
- 02Treating a like-for-like modern replacement as capital and missing a deduction.
- 03Keeping no note of why a cost was treated as it was.
What to do
A short checklist
- Record the condition before and after significant work.
- Note repair or improvement on each invoice.
- Take advice on jobs that mix the two.
Sources
Checked against these sources on 16 September 2026. A guide to the rules in England, not legal advice: for a dispute or a possession claim, speak to a solicitor.
