I was instructed by Nottingham City council as part of the House in Multiple Occupation (HMO) licensing scheme to fit ‘Grade A’ fire alarm and emergency lighting systems in my properties. HMRC are now saying that they are not allowable as a taxable deduction - are they correct?

Arthur Weller replies:
In my opinion perhaps they mistakenly construed this expenditure as capital expenditure. But actually it is revenue expenditure. It is not exactly the same, but similar to that which can be seen on www.hmrc.gov.uk/manuals/bimmanual/BIM47310.htm that an alarm system and floodlighting are qualifying assets, and this is not affected by the fact that the assets may become fixed to land.